When you have a tax debt that requires resolution, you have various options. Some of the IRS resolution plans don’t require you to pay any amount of tax debt, or perhaps just a portion. These plans are Currently Not Collectible and Offer in Compromise, respectively. There are also other popular payment plans, such installment agreements, which many taxpayers qualify for, and also allow partial payment of the tax debt.
In seeking IRS debt relief, taxpayers must ensure that they choose the most appropriate payment plan. They should consider their financial capability, the unique particulars of their case, and the qualifications for the various payment plans before applying. Taxpayers who have a large debt may choose a tax service to help them with the resolution.
When calculating the amount to be paid to the IRS, taxpayers must include the penalties and interest in addition to the original debt amount. Even if they have received a notice(s) regarding tax debt payment, they should make their own calculations. Sometimes, the IRS does not include tax deductions and credits in their estimation of the tax debt. Therefore, it’s important to check the accuracy of their assessment.
Taxpayers should plan resolution efforts as early as possible to avoid facing aggressive IRS collection actions, as well as the accumulation of penalties and interest on the debt.