Tax debt resolution is simple, if the taxpayer in debt can pay the entire tax bill in one go. However, paying in a lump sum is difficult if the tax debt is large. The first thing to do if you have a large tax bill is to learn about the IRS’ tax debt payment plans. The IRS’ payment plans are designed to allow comfortable payment of tax debt. Before applying for one, consider every eligibility and payment criteria so that you choose the most appropriate option.
Every payment plan has unique qualifying factors. You must be comfortable resolving the tax debt using the payment method you choose. For example, if you choose an Installment Agreement, you must be able to pay every fixed monthly installment for the decided period of time. If you fail to do so, the IRS will cancel the pla, charge a penalty, and persue collection actions.
Many taxpayers apply for an attractive payment plan such as a tax debt reduction plan even when they have the ability to pay the full tax debt. It must be remembered that the IRS charges a penalty on such applications. Before applying for an IRS tax debt payment plan, consult a tax specialist or a tax company so that you are aware of the resolution process and the choices available to you.