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What Are My Options with My IRS Tax Debt?

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If you are struggling with tax debt, you are definitely not alone. Estimates put the number of Americans who owe back taxes somewhere between eight and 20 million.

Colorado Springs Tax AttorneyAs a Colorado Springs tax attorney, I work hard to help people find reasonable solutions for a wide variety of tax problems. If you are behind on your taxes, there are many options available to you. Here are just a few:

Option 1: An Installment Plan

The IRS offers installment plans to taxpayers who have fallen behind on their taxes. This allows you to make monthly payments toward your tax debt. An installment plan also helps you avoid liens and wage garnishments, which can hurt your finances and your credit.

Contrary to what you may have heard, the IRS is generally quite flexible when it comes to installment plans. As long as you are willing to work with the agency, and you are making a good faith effort to resolve your debt, you can most likely work out a reasonable plan.

Option 2: Offer in Compromise

In some cases, a taxpayer’s debt is simply more than he or she can afford. As the name suggests, an offer in compromise allows you to settle your tax debt for less than what you owe.

The IRS requires a great deal of information from the taxpayer before it will accept an offer in compromise, and there are no guarantees your offer will be accepted.

You can greatly improve your chances of making a successful offer in compromise by working with a qualified, experienced tax and debt relief attorney.

Option 3: Currently Not Collectible Status

If your current finances leave you with little or no money after you pay your everyday living expenses each month, you may be able to qualify for Currently Not Collectible status with the IRS.

This allows you to defer your payments until you get back on your feet. Just because you defer making payments on your debt, however, does not mean it goes away. The IRS ceases its collection efforts, but your debt continues to accrue interest.

For this reason, it’s very important to work with a tax attorney before pursuing Currently Not Collectible status. Your lawyer can help you review all your options before pursuing the one that works best for your situation.

Option 4: Bankruptcy

Certain types of tax debts can be discharged in bankruptcy, but it’s important to work with a knowledgeable bankruptcy lawyer before filing for a Chapter 7 or Chapter 13 bankruptcy, as other options may be more beneficial for your unique circumstances and goals.

Don’t Ignore Your Tax Debt

Whatever solution you choose to pursue to resolve your tax debt, ignoring your debt should not be one of them. Sticking your head in the sand is never a good option when it comes to the IRS and tax debt.

If anything, this approach will only make matters worse. If you can’t afford to pay your tax debt, there are many ways for you to recover financially. Your tax lawyer can help you explore all possible solutions, so you can stop worrying about your debt and start rebuilding your life and your finances. Tax law changes constantly, so speak to your tax lawyer today about the latest tax debt resolution programs available.

Colorado Springs Tax Resolution Law Firm

When you owe back taxes, the knowledge can weigh heavy on your shoulders. Fortunately, relief is available. If you are looking for ways to settle or reduce your tax debt, get in touch with a Colorado Springs tax attorney today. We help clients with individual tax representation, as well as businesses with corporate tax issues.