Tax Debt Relief: What the IRS Wants?

Posted on February 7, 2022

Tax Debt Relief: What the IRS Wants?

It is true that significant tax debt is not easy to pay, but some of the difficulties can be eased. Many tax debt cases qualify for tax debt relief, such as reduction of IRS penalties, or a reduction/postponement of the tax debt itself, but appealing and negotiating those terms with the IRS requires professional help.

Apart from a reduction in the tax debt amount, taxpayers can also apply to postpone their payment of tax debt. The IRS is not lenient or charitable. Every tax debt relief program has strict qualifying factors. Whether a taxpayer qualifies for tax debt reduction largely depends on their financial condition.

Immediate Payment for Tax Debt Relief

The IRS wants the tax money owed immediately. The IRS also encourage taxpayers to pay their tax liability in full: “Based on the circumstances, a taxpayer could qualify for an agreement to full pay within 60 or 120 days. The IRS is willing to offer these short term agreements to full pay in order to assist in tax debt repayment. A taxpayer can request an agreement length depending on the specific situation. Penalties and interest incurred will be less through an agreement to full pay within 60 or 120 days rather than seeking to enter into an installment agreement.”

Under an Installment Agreement, taxpayers can pay the full debt amount in fixed monthly payments. However, the IRS will continue to charge interest on any amount that remains to be paid.

Avoiding Payment of Tax Debt Provides no Relief

Avoiding or refusing to pay a tax debt does not bode well with the IRS. They have legal measures, such as placing a lien and/or a levy to collect from taxpayers. They can seize and/or sell properties, rights to properties and assets, freeze bank accounts, which can harm a taxpayer’s credit.

Though the IRS relaxed its lien filing rules in 2011, and no longer places liens on unpaid taxes exceeding $10,000, it is risky avoiding tax debt payment after receiving IRS notices. A tax lien can reduce 100 points from a taxpayer’s credit score.

Tax Debt Relief Help: Dealing with the IRS

It is best for taxpayers to let tax attorneys deal with the IRS on their behalf. Tax attorneys and enrolled agents can negotiate IRS resolutions. They also help reduce IRS penalties, reduce the tax debt amount, remove liens and levies, postpone tax debt payments, and assist taxpayers in arranging affordable payment options.