When someone owes taxes to the IRS, the usual course of action is collecting penalties or liens. However, the number of liens has fallen more than 50% since 2010, there is still a huge population in America that is burdened by tax debts.
What Are Tax Debts?
As the name suggests, the taxes that someone owes to the federal agency is accountable for their tax debts.
It could be due to any reason – from missing deadlines to filing wrong taxes.
If you have also received a legal notice from the IRS regarding tax debts, then this article is for you.
How To Get Rid Of IRS Tax Debts?
As already mentioned, the tax debts could be due to several reasons, but, notably, all are resolved by paying off the debts only. Indeed it is a no-brainer, you need to pay off your debts in order to get rid of it.
But, how do you do it when you owe taxes to the IRS? Do you simply pay the cheques or are there any legal formalities that need to be fulfilled?
Keep reading to know more.
IRS Fresh Start Program
As a response to the 2008 financial recession, the IRS brought in a tax relief plan for taxpayers to cope up with unemployment and reduced earnings. As mentioned here, https://silvertaxgroup.com/everything-about-irs-fresh-start-program/, the program is rather a series of changes to the tax code. But, notably, not everyone can enjoy the benefits of this program. There are certain eligibility criteria in place to allow only the citizens who cannot make their own taxes.
Delay And Pay With Penalties
The easiest of all the courses is to delay the tax payment. Ideally, it would also mean that your taxes would be coupled with penalties to be paid. However, in some cases, the IRS may waiver off the penalty. It usually depends on reasoning and proof. You would need to prove that you were unable to afford minimum living expenses, be it if you would have paid the taxes or otherwise.
Offer In Compromise
In some cases, the IRS may consider an “offer in compromise” settlement for taxes that you owe. It literally means that you could pay less than what you actually owe to the IRS and start afresh with a blank canvas. However, when seeking an “offer in compromise” you might need to prove your financial hardships.
When it comes to taxes, there are a lot of formal applications and paperwork, apart from legal conformities. Failing to meet any single one of them can easily land you in trouble with the IRS. Not only it is important for your business’s financial health but for your personal finances too.
A rather easier and more sophisticated way to deal with tax problems is to have an experienced attorney by your side. The professionals would be better equipped with all the knowledge and information that you need to get out of the tax troubles.