Dealing with IRS debt can be stressful and overwhelming, but several options are available to resolve the debt and get back on track with your finances. Texas taxpayers can use one of the following ways of fulfilling any obligations they have with the IRS.
One option is to set up a payment plan with the IRS, also known as an installment agreement. This allows you to make monthly payments towards your debt and can prevent further penalties and interest from accruing. You can apply for a payment plan online or by mail.
Offer in compromise
An offer in compromise is a negotiation with the IRS to settle your debt for less than the total amount owed. This option is only available in certain circumstances, such as when you can’t pay the total amount or when paying it would cause undue financial hardship.
Currently not collectible status
If you can prove to the IRS that you cannot pay your debt due to financial hardship, they may place your account in a “Currently Not Collectible” status. This means the IRS will temporarily stop trying to collect the debt, but interest and penalties will continue to accrue.
File delinquent tax returns
If you have outstanding tax returns, filing them as soon as possible can help resolve your debt. This is because the IRS will often charge penalties and interest on past-due returns, so getting them filed can reduce the amount owed.
Understanding negotiations with the IRS
If you are unable to resolve your debt, you may need to examine all options available to you by tax law. Doing your due diligence can allow you to gain the necessary knowledge to set up a payment plan and find the best solution for your unique circumstances.
Resolving your IRS debt
There are several options available to resolve IRS debt. The best course of action will depend on your financial situation, so it’s essential to consider your options and seek professional help. Remember, the sooner you resolve your debt, the sooner you can get back on track with your finances.