Question: I’m deep in a hole. My business failed after the economy collapse, and I owe a bundle in taxes. I’m not even sure exactly how much. But I know I can’t pay it. What can I do?
Answer: I’m very sorry to hear about your predicament, but if it’s any comfort, please know that you are not alone. There are many, many U.S. consumers in your situation — even more today than usual due to the global economic woes.
So the first thing you should know is that you do have options, and while it might seem like you are in a financial hole from which you will never escape, I assure you that you are not.
Your first move should be to consult a qualified tax professional. He or she will analyze your previous returns and your current financial status and determine with certainty how much you owe the IRS. It’s not in your interest to start negotiating with the IRS until you know to the penny how much money you owe in back taxes.
Once your qualified tax professional has analyzed your previous returns with a fine-tooth comb, he or and she can begin the negotiation process with the IRS. Given your brief description, I would guess that the Offer in Compromise would be the best solution for you.
Developed by the IRS as a way of bringing into compliance taxpayers who are unable to pay their tax debt, the Offer in Compromise allows indebted taxpayers to negotiate a settlement amount that will eliminate their tax debt once and for all. This settlement amount often equates to a significant discount!
But you have to qualify for the Offer in Compromise. However, if you do not qualify, rest assured you have many other options available.
More Tax Help, IRS News and Tax Relief Tips:
- Paying Off Tax Debt with the IRS Offer in Compromise or Installment Agreement Plan
- Pay Off Tax Debt with Offer in Compromise or Installment Agreement?
- IRS Question: How Do I Pay Off My Back Taxes?
- IRS Question Corner: How Do I Pay Off Back Tax Debt?
- Got Back Taxes? The IRS Payment Plan or Installment Agreement Can Help