According to recent reports, it’s getting tougher for the tax debtors in the US to negotiate a deal with the IRS and pay back a fraction of what they owe. But if you turn to a private company for help, this may backfire in the long run. It is said that the nation’s largest tax resolution company recently settled the allegations of 18 states about consumers being misled to produce results. Though the tax resolution firms can advertise about getting the tax collectors off your back by compromising a deal with the IRS, yet such pitches are most often ambiguous. So, if you’re going through debt problems with the IRS, make sure you take immediate steps to lessen your worries and avoid being under the gun of the IRS. Have a look at the steps that you can take.
- Find a tax professional: If you can hire a tax professional, you can get his guidance throughout the process and thereby get out of debt in the near future. He should be a Certified Public Accountant, a tax attorney or an enrolled agent. The CPAs and the attorneys are limited to practicing in only those states where they’re licensed. You should ensure that he is licensed so as to get maximum benefits from him.
- Keep the costs within your means: If you hire a tax professional, he will charge you some fees and unless you keep these costs low, you may start incurring further debt in the process. Ask your tax pro to focus only on the strategies through which you can negotiate your debts with the IRS. Ask him to minimize the overall fee so that you don’t have to fall in trouble in future.
- Opt for installment agreement: This is usually the easiest way to set up an arrangement plan with the IRS to facilitate the debt repayment structure. There are usually 3 different types of installment agreements, the guaranteed installment agreements, the streamlined installment agreements and partial payment installment agreements. Through such options, you can repay the entire debt but in easy and affordable monthly payments throughout a stipulated period of time.
- Offer in Compromise: Just as you settle your credit card debts, you can even settle for an amount that is less than what you actually owe the IRS. As you’re going through a financial hardship, you have to relate this cause to the IRS so that they know the actual reason that is barring you from making the timely payments. They will then waive off a portion of your debts and reduce the total amount that you have to pay.
So, if you’re trying to stay out of the IRS debt, you should make sure that you choose any of the above mentioned options. Weigh the pros and cons of each option so that you don’t select an option that is not tailored to meet your needs. Erase your debt problems as soon as possible so as to get back a firm grip on your finances.
