Millions of taxpayers find themselves in debt each year. An individual can use different methods to resolve their liability, including payment plans, paying the entire debt at once or possibly requesting innocent spouse relief. Many of the resolutions have eligibility requirements that must be met before approval is given.
Some of the commonly used IRS plans are the Installment Agreement and Offer in Compromise. Taxpayers that have the financial ability to pay their entire tax debt often opt for an Installment Agreement, as it provides them more time to pay. On the other hand, taxpayers that are incapable of paying the entire amount at once may choose an Offer in Compromise to get a reduction.
Each method of resolution has certain advantages and disadvantages. Depending upon the amount of the tax debt and the financial capability of a taxpayer, the best resolution will vary.
There are numerous kinds of Installment Agreements, such as the Streamlined Installment Agreement, Partial Payment Installment Agreement, and Guaranteed Installment Agreement. Each plan has been designed to suit different taxpayer situations. Regardless of a taxpayer’s circumstances, the IRS has a resolution plan.