Why Resolution of Tax Debt is Necessary

Last updated on October 9, 2022

Resolution of tax debt is necessary and resolution of tax debt at the earliest opportunity is most beneficial. Taxpayers under tax debt should make efforts to resolve their tax debt using IRS payment plans if they are unable to pay the entire debt amount in a lump sum. There are various payment plans that allow taxpayers comfortable resolution of tax debt.

Tax debt resolution helps taxpayers avoid collection actions such as tax lien and levy. If the tax debt remains unresolved even after the IRS sends notices, the IRS will first place a lien and if the case still is not resolved, the IRS then moves to levy. Under levy, the IRS sells the property and/or assets of a taxpayer to fulfil a tax debt.

Although taxpayers should resolve back taxes as quickly as possible to avoid the accumulation of penalties and interest, it is especially essential for taxpayers to resolve tax debt after the receiving of IRS notices in order to avoid IRS collection actions.

Back taxes increase over time because the IRS charges penalties and interest on it. Penalties and interest can substantially increase the tax debt amount if left to accumulate over a long period of time. Resolution of tax debt must be done as quickly as possible, as it provides the most advantages to taxpayers.