How To Settle With The IRS
The unpleasant reality of adulthood is that we all have to deal with taxes. We still fear the day we have to pay the Internal Revenue Service (IRS) even though we are aware there is no way around it.
While avoiding taxes is certainly not an option, not making such payments on time might have serious repercussions as well. Of course, you’ll have to pay them off ultimately, but the longer you wait, the more interest will accrue, making the burden even heavier.
Although the IRS rarely grants exceptions, it can be sympathetic to those who can prove that their inability to pay was due to a genuine financial hardship and not an attempt to defraud the government. However, negotiating a settlement with the IRS can be tricky business and one must be aware of the various ways this can be done.
A very effective technique to avoid taking on the entire amount of debt at once is to use instalment payment plans. These arrangements allow you to pay the IRS what you owe them every month. However, the IRS has requirements that you must fulfil before you may do this. These include demonstrating that you can pay the monthly instalments on time and that you owe them no more money than a particular sum
Offer in compromise
In essence, an offer in compromise occurs when the IRS agrees to accept less money from you than you originally owed. This is feasible if you can demonstrate to the IRS that you are unable to pay the full amount back; in that case, they will offer you a compromised, reduced amount to lighten your financial load. You are given two years in this negotiation to pay off your loan.
When it comes to what the general public owes the IRS, they may be pretty rigorous. Never let your payments become behind schedule. However, you may be able to work out a deal with the IRS if you have some issues, like not having enough money to repay them. Only when it’s absolutely necessary should you do this. Inevitably, it is a legal issue.
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