Best Methods to Achieve Tax Debt Relief

Posted on October 10, 2022

Best Methods to Achieve Tax Debt Relief

Every taxpayer with tax debt wants to get that burden off their shoulders, but often they are unaware of the best method to achieve tax debt relief. It helps to remember that tax debt resolution does not always involve full payment of tax debt. There are various IRS debt payment plans that involve tax debt reduction, payment in installments, and postponement of payment. Taxpayers may, according to their financial condition, resolve their back taxes using a payment plan.

Relief through Tax Debt Reduction

Taxpayers under tax debt may get their tax debt reduced if their financial condition does not allow them to pay their full amount of tax debt. Offer in Compromise is the most popular tax debt reduction plan where the IRS reviews the financial details of taxpayers to estimate their ability to pay. The amount of reduction achieved depends on the level of financial hardship being experienced by the applicant.

Offer in Compromise is a method to resolve back tax for taxpayers that are only able to meet their basic living needs and meet certain other requirements.

Tax Debt Relief using Currently Not Collectible

Tax debt resolution can also be achieved if taxpayers are not able to pay any amount of tax debt. Currently Not Collectible is a payment plan under which taxpayers can seek postponement of payment of back tax because they are presently not in a condition to pay any amount of tax debt. The advantage of qualifying for a payment plan is that taxpayers avoid IRS collection actions.

Taxpayers must remember that the IRS will keep charging penalty and interest on the tax debt that remains to be paid until the statute of limitations, after which the IRS cannot recover tax debt.

Tax Debt Relief through Installment Agreement

Taxpayers that can pay their full tax debt, but not in a single payment can use an Installment Agreement for resolving their case. There are various kinds of Installment Agreements with different qualifying criteria. It is advisable for taxpayers to hire professional help to achieve the best possible resolution.

Every IRS payment plan has strict qualifying factors, but some qualifying criteria are flexible and can be negotiated. To achieve the best possible resolution, taxpayers must have in-depth knowledge of all payment methods, IRS policies and tax laws. A professionally prepared tax debt case has better chances of getting qualified for the right payment plan. Negotiating the particulars of the case also assists taxpayers in achieving a resolution that is the most beneficial for their situation.