Smart Solutions For Federal Tax Issues
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Steps to settling a delinquent IRS tax debt

On Behalf of | Sep 6, 2022 | Tax |

Paying taxes is a fact of life for practically every business operator in Texas. Most business owners actually pay quarterly in most cases, so the IRS is always right around the corner. The IRS understands this issue for small business operators, and they accept four methods of resolving tax burdens when payments become delinquent.

IRS payment plans

The first option is being placed on a payment plan that considers ongoing tax obligations along with repayment of delinquent funds. There are both short-term and long-term plans available based the amount of tax debt owed to the agency.

Offer in compromise

The second option for delinquent taxpayers is making an offer in compromise to settle an outstanding tax obligation. While the IRS is often not receptive to accepting an offer, it could be an answer that allows the account to be reset or closed when a business stops operating.

“Not collectible” designation

There are also tax debts that are effectively not open for collection. This typically happens when the IRS claims a taxpayer owes money even though they possess little to no funds to use in account settlement. While this does not eliminate the debt, the IRS officially recognizes that they cannot attach to assets or file an interception order with an employer for settlement.

Retain a tax relief company

The final option for delinquent taxpayers is retaining a tax relief company that can deal with the IRS as an official representative. These are professional debt relief representatives who communicate with the IRS on a regular basis and understand how to negotiate an agreement to make the account current.

The IRS realizes that it is easy for taxpayers to get behind in bad cash flow months, and it can also be difficult to get caught up. However, they are not forgiving in most situations even when they are patient.