There are various ways in which tax debt can be resolved. If you have the financial ability to pay your entire tax debt in a single payment, you can prevent the penalties and interest that the IRS charges each month.
Another method of resolving back taxes is through making installment payments. Paying in installments is popular because it allows a taxpayer more time to pay. Even though the IRS continues to charge penalties and interest, making larger payments early on can cut down on what you ultimately spend.
Taxpayers without financial means may consider applying for IRS tax reduction plans. A reduction plan lowers the total tax debt to an amount that can be paid by the taxpayer in order to resolve the case.
Taxpayers with no ability to pay can postpone satisfying their tax debt by using Currently Not Collectible. This plan stops all collection actions and allows more time for the taxpayer to handle his or her liability.
It is important to note that every payment plan has specific qualifying factors that not everyone qualifies for. Using the help of a tax service or a professional is recommended to obtain a resolution that best suits your needs.