Tax debt should be resolved only after carefully reviewing all options. It’s important to be thorough in considering the resolution choices the IRS offers. The IRS has various resolution plans which are appropriate for different financial situations. Some plans allow individuals to make installment payments, while others allow tax debt reduction. A resolution plan may also allow for a postponement of collection actions.
Each resolution plan has unique qualifying factors. For instance, if you are considering paying your tax debt through an installment agreement, then you will need to choose a plan appropriate for the amount you owe. There are various kinds of installment agreements, each having different qualifying factors. When a taxpayer owes a greater amount, the IRS may request more comprehensive financial details.
When seeking relief, taxpayers must also consider the penalties and interest that will be charged. Each month, the IRS adds penalty and interest on the tax debt amount that is outstanding.