Prior to choosing the best option for resolving outstanding tax debt, the first step is accurately determining how much you owe. Having calculated the correct amount owed, the IRS offers three principal methods to resolve that tax liability: (1) an Installment Agreement, (2) an Offer in Compromise, (3) and “Currently Not Collectible.” The Installment Agreement allows you to pay off your tax debt over time. The Offer in Compromise allows you to pay off your tax debt in a single payment or with a short-term payment plan. Finally, you can petition the IRS to classify you as “Currently Not Collectible” if you cannot afford any payments. Barring the three options outlined above, the alternatives are to take a “wait and do nothing” approach, or to declare bankruptcy and try to have your tax debt discharged. Contact us now if you have or expect to owe a significant amount to the IRS, or seek to negotiate a reduced payoff amount, it is best to consult and hire a qualified tax professional. I will explore the different options for resolving your tax debt in detail in the coming weeks.
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Tax Law Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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