Question: I’m in deep trouble. Bottom line: too much tax debt, not enough income. The reasons for this are many: bad tax advice, recklessness on my part, and most recently (and tragically for me) a significant loss of income. I’m petrified about the future. Can you help?
Answer: First of all, I’m very sorry to hear about the position you’re in. While it may not be immediate consolation, please know that you are not alone. There are many U.S. consumers in a similar situation.
And here’s the good news: You have options. The first thing you should do is consult with a qualified tax professional, and yes, he or she will be able to help you determine which option is best for you to get out from under your tax troubles. Once you consult with a qualified tax professional, he or she will analyze your previous tax returns with the proverbial microscope, looking for mistakes or lost opportunities for deductions, and this process alone will often result in the lowering of your tax bill.
But if your tax debt is substantial, then this won’t solve your problem entirely. But what might is either the Offer in Compromise or the Installment Agreement.
Designed by the IRS for taxpayers who are unable to pay their tax debt, even over time, the Offer in Compromise allows you to make a settlement offer to the IRS that will eliminate your debt for good. Oftentimes, this settlement results in a significant discount But there’s a catch: You have to qualify for the program and be able to demonstrate that you cannot pay off your debt, even if given time.
However, if you do not qualify for the Offer in Compromise, there are other options, such as the Installment Agreement, which will let you pay down your tax debt over a period of time.
More Tax Help, IRS News and Tax Relief Tips:
- Got Back Taxes? The IRS Payment Plan or Installment Agreement Can Help
- Paying Off Tax Debt with the IRS Offer in Compromise or Installment Agreement Plan
- IRS Tax Enforcement Described As Harsh
- Pay Off Tax Debt with Offer in Compromise or Installment Agreement?
- IRS Question: How Do I Pay Off My Back Taxes?
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