The IRS has various tax debt relief plans to help taxpayers resolve their tax debt, depending upon their financial condition. Every tax debt resolution plan has qualifying factors that must be met to begin resolution. As many taxpayers do not have the financial capacity to pay their entire tax debt, the IRS has tax debt reduction plans such as Offer in Compromise and Partial Payment Installment Agreement to help them resolve their debt.
Before applying for a relief plan, it is important to know every qualifying factor and resolution requirement. After you have qualified for a payment plan, defaulting on the agreement can cause the IRS to terminate the plan. In order to qualify for a payment plan again, the IRS will require an explanation for the default. Therefore, it is best to choose wisely.
To achieve a beneficial resolution, it is essential to consider methods through which you can reduce your penalties, interest and tax debt. Even if you do not meet the requirements of tax debt reduction plans, you must consider the time period under which your tax debt remains to be paid. Time and the amount of tax debt are of immense importance for IRS debt resolution, as the penalty and interest are charged each month on the total tax debt amount. It means that the earlier you pay and the more you pay, the lesser you will need to pay on penalties and interest.
Taxpayers may choose to uitlize the services of a tax resolution company or a tax professional, especially if their tax debt amount is large. It will help them in the successful and early resolution of their tax debt.