As a collector, the IRS carries the weight of the federal government behind it. In addition to having extensive methods to collect on tax debt, the IRS also can be very patient making a Tax Debt Settlement possible. Of course, the longer you take to pay your tax debt, the more you will owe.
4 Ways to Get a Tax Debt Settlement
1. Installment Agreement:
A standard monthly payment plan for paying off the IRS. Therefore, it is the tax debt settlement that pays off the debt in full.
2. Partial payment installment agreement:
A fairly new tax debt settlement program where you have a long-term payment plan to pay off the IRS at a reduced amount. Much like a monthly credit card payment, IRS payment plans allow you to pay off your unpaid back taxes in installments instead of all at once. A well-qualified Enrolled Agent will negotiate the lowest possible monthly payment for your needs.
3. Offer in Compromise:
A tax debt settlement program where you can settle your tax debts for less than what you owe. Requires making a lump sum or short-term payment plan to pay off the IRS at a markedly reduced amount. If you owe the IRS more than you can afford to pay, this could certainly be the plan for you. If you qualify for the Offer in Compromise program, you can save thousands of dollars in taxes, penalties, and interest.
4. Currently Not Collectible:
A tax debt settlement program where the IRS voluntarily agrees not to collect on the tax debt for a year or so. Currently Not Collectible means that a taxpayer has no ability to pay his or her tax debts. The IRS can declare a taxpayer “currently not collectible,” after the IRS receives evidence that a taxpayer has no ability to pay. This is a truly useful tool.