If You Want To Settle Your Tax Debt

In case you are unable to pay your taxes to the IRS, tax bill arises; interest and penalties are added to the tax liability. What actions should be made in this case?

We offer you 5 ways to deal with your tax bill. The choice depends on your current financial situation.

1. A long-term reduced amount payment plan, or partial-pay installment agreement
2. Installment agreement: Monthly payment plan
3. Choosing one of the two offered agreements, be sure to accomplish Form 9465 (Installment Agreement Request) and Form 433-A (Collection Information Statement). Calculate your future monthly payment. Form 433-A requires three months' worth of documents of income and expenses. Then you write a letter asking for an installment agreement. It is send together with the forms and 3 months' worth of documentation to the IRS. The reply is expected within 90 days.

Filing for bankruptcy: Tax debts are discharged under Chapter 7 or Chapter eleven, twelve, or 13 bankruptcy. Chapter 7 allows you liquidating your debts and Chapter 11, 12, or 13 bankruptcy lets you negotiating a payment plan.

Form 656 (Offer in Compromise) is filed to reduce tax liability. This is done through lump sum settlement or short-term settlement plan, by giving evidence of Doubt as to liability, Doubt as to collectibility, or Hardship.

- Presently not collectible status: A tax debt is not collected by IRS for a specified period. Form 433-F must be filled out. A yearly statement will show the amount you owe.

A tax professional will assist you in the procedure of your tax bill resolution. Use this opportunity to lighten up your life.