If you have tax debt, you need to take that debt seriously. If you don't, the IRS could come after your home and vehicle. When it comes to dealing with tax debt, you need to have a plan.
Don't Ignore Things
You should not ignore any debt that you have with the IRS. The IRS can seize money from your bank, and they can even take away your home and your car if you don't pay your taxes. You can literally lose your belongings. If you are in too much tax debt and you avoid paying your taxes, you can even face jail time. Additionally, the longer you ignore the debt, the more it is going to grow. Your debt may grow and exceed what you originally owed.
You shouldn't ignore your debt to the IRS because ignoring it can have serious consequences. You need to act and come up with a plan.
Apply for Hardship Agreement
If you are in a tough finical situation, you can apply for a hardship agreement. With a hardship agreement, you can apply for an offer in compromise which will allow you to settle your tax liability. When you settle your tax liability, you will be able to settle your bill while paying less than what you owe.
It is difficult to get a hardship agreement and you must meet high standards. You must have lost your job or experienced a job lose. You need to really be in a tough financial situation and struggling to get by in order to get a hardship agreement.
If you have a lot of assets and you are bringing in a decent income but just not managing your money right, don't expect to get a hardship agreement.
Set Up an Installment Agreement
You can also set up an installment agreement. With an installment agreement, you will be able to make payments on your tax debt. You will be able to pay your bills off over a set amount of months. You generally have some control over what the monthly payments will be and what the payoff amount will be. You need to keep in mind that you will continue to incur penalties and interest on your debt over time. However, this is often the best and most manageable way to deal with your tax debt.
If you need assistance dealing with your tax debt, hire a personal tax resolution specialist to help you with this process. They will help you get a handle on your debt and get your life back on track. For more information, contact companies like Inside Out Tax Resolution Services.