If you owe taxes to the IRS or state tax authority, it can be an incredibly stressful and daunting experience. However, it’s essential to know that you have options to negotiate your tax debt and avoid the consequences of unpaid taxes, such as wage garnishments, levies, and liens. In this article, we’ll provide you with a comprehensive guide on how to negotiate with the IRS or state tax authority, including strategies for negotiating a payment plan or tax debt settlements, understanding your options for relief, and tips for working with a tax professional to achieve the best possible outcome.
- Understanding your options for relief: When you owe taxes, the first thing you need to do is determine your eligibility for relief options. The IRS and state tax authorities offer several programs to help taxpayers who are struggling to pay their tax debt. Here are some of the most common relief options.
- Offer in compromise: An offer in compromise (OIC) is an agreement between you and the IRS or state tax authority to settle your tax debt for less than the full amount owed. To qualify for an OIC, you must meet specific eligibility requirements; including demonstrating that you’re unable to pay your tax debt in full or that paying your tax debt would create financial hardship.
- Installment agreement: An installment agreement (IA) allows you to pay your tax debt in monthly installments over time. To qualify for an IA, you must meet specific eligibility requirements, including demonstrating that you’re unable to pay your tax debt in full and that you’re committed to making monthly payments until your debt is paid off.
- Currently not collectible: If you’re currently unable to pay your tax debt due to financial hardship, you may qualify for currently not collectible status. CNC status allows you to temporarily suspend collection activity until your financial situation improves.
- Negotiating a payment plan or settlement: If you’re unable to pay your tax debt in full, negotiating a payment plan or settlement with the IRS or state tax authority may be an option. Here are some strategies for negotiating a payment plan or settlement.
Negotiating with the IRS tax debt settlements or state tax authority can be a complex and challenging process, but it’s essential to know that you have options to resolve your tax debt. Whether you’re negotiating a payment plan or settlement, understanding your eligibility for relief options, or working with a tax professional, taking action to resolve your tax debt can help you avoid the moments of unpaid taxes and achieve peace of mind.