Falling behind on taxes is not uncommon for many working individuals and businesses. It might be difficult to pay off all your tax debt at once, and sometimes waiting and ignoring the debt will only exacerbate the situation. That is why the Internal Revenue Service (IRS) offers a few settlement options for taxpayers who are struggling to pay off their tax debts. In this article, we will discuss the different IRS settlement options available and what you need to know about them. Delve even deeper into the subject by visiting this information-packed external website we’ve prepared for you. Grasp better!
If you cannot pay off your tax balance in full, you might be eligible for an installment agreement. An installment agreement is a payment plan that allows you to pay off your tax debt in equal monthly payments over a period of time. The IRS offers different installment agreements based on the amount of your debt and your financial situation. For those who owe less than $50,000, the IRS installment agreement is generally easier to obtain. To qualify, you must have filed all your tax returns, and you cannot have defaulted on a previous installment agreement.
Offer in Compromise (OIC)
An offer in compromise (OIC) is a settlement agreement between the taxpayer and the IRS that allows the taxpayer to pay off the tax debt for less than the full amount owed. This settlement is only available to taxpayers who cannot reasonably pay off the full balance or if paying the full amount would cause financial hardship. The IRS will evaluate your expenses, potential future income, and assets to determine whether you qualify for this settlement.
Currently Not Collectible (CNC) Status
If you are currently unable to pay your taxes and your basic living expenses, you may be eligible for Currently Not Collectible (CNC) status. This option means that the IRS will not attempt to collect the tax debt for a specific period. The CNC status is only temporary, and the IRS will continue to examine your financial situation at least once a year to see if you are able to make payments. Delve further into the topic by reading this carefully chosen external resource. resolve credit!
IRS settlement options are available to help taxpayers who are struggling to pay tax debts. You may qualify for an installment agreement, an offer in compromise, or currently not collectible status. Choosing the best settlement option for you depends on your financial situation and the amount you owe. It is important to remember that opting for these settlements will not eliminate your tax debt, but could make it more manageable. Working with a tax professional during this process can help make it easier to navigate and improve the likelihood of success.
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