When it comes to taxes, all taxpayers should know that two scenarios can affect their financial status.
If you have been overpaying your tax, you are eligible to get a refund. On the other hand, if you were underpaying you will pay back the money that you owe to the IRS. If you are struggling with unpaid tax debt, here is what you can do.
Set up instalment agreements
Taxpayers who owe less than $250,000 may qualify to set up instalment agreements with the IRS to spread the payment of their debts over a specific period. With this agreement, the taxpayers in debt can source funds from different angles while pursuing their day-to-day business. Instalments are flexible in that they take off the pressure of making prompt payments that can affect your work.
IRS fresh start program
Many people may be overwhelmed by debt due to various factors that can affect their earnings, particularly the self-employed. To reduce your tax burden, you could consider an IRS fresh start program that really works because it makes life easier for people struggling with debt as it does not involve a lien placed on a house or car. Lien processes can be burdensome. This is the primary reason why this program is ideal for all people facing problems with their tax obligations. There are many options that you can consider under this program.
Hire an attorney
It is a good idea to enlist the services of a professional attorney if your tax debt has become overwhelming. The advantage of hiring a specialist lawyer in tax-related issues is that they have experience in dealing with similar cases. They can negotiate better settlement terms like an Offer in Compromise when you cannot raise the full amount within a short period. Some taxpayers qualify for an Offer in Compromise where they may settle their bills for less than they owe. Seasoned lawyers can also offer helpful tips to use in the future to manage your finances to avoid a similar situation.
Temporary delay collection
The taxpayers who are overburdened by unpaid debt can also get relief from contacting the IRS and request a delay in the collection of taxes. The IRS can determine if the taxpayer is unable to pay, and they will delay their collection process until the time when the taxpayer’s financial circumstances improve. You should never ignore the problem because the IRS rarely ignores such issues.
While it is mandatory for all people who earn a substantial amount of money to pay taxes to the IRS, some individuals end up in tax debt as a result of different factors. There is no way you can evade paying tax since it is the government’s largest source of revenue. Therefore, if you are struggling with tax debt, it is vital to negotiate better settlement terms with the responsible authorities to reduce the burden.