What is Tax Debt Relief? What Will Happen If I Am Unable to Pay My Taxes?

Out of all the debts you might be pondering, the federal tax debt is the most unavoidable. No matter what, the government will always find a way to collect it from you. When taxes become overdue, they involve harsh penalties and interest charges, not just The IRS can also place liens on property, seize your funds, and garnish your paycheck.

The IRS may seem harsh, but its intention is not to punish or go after the money that you don't have; in fact, the agency provides payment options for those who can't pay.

What is tax debt relief?

You can resolve the debt owed to you by choosing tax debt relief payment plans. These relief options offered by the IRS involve not just payment plans but also negotiating debt settlements. The best options depend on the debtor's financial situation.

Who needs tax debt relief?

If you are facing anything that we have listed below, you need to explore debt relief as soon as possible.

● Your taxes are overdue, and you don't have a way to cover the bill.

● The IRS has already sent you letters regarding your debts.

● The IRS hired a private debt collector.

● You failed to file tax returns for more than a year.

● You have been declared seriously delinquent.

● The IRS has instructed you to confiscate or cancel your passport.

How can you deal with tax debts?

Many tax-debt relief programs are available that aim to streamline and ease your burden.

1-IRS relief program

If you need more time to pay your debt, see if you can qualify for the IRS relief program. The program offers two kinds of plans: short-term and long-term payment plans. These payment plans do not get you out of penalties or interest; they just help cover until your balance reaches zero.

2-Offer in compromise

Another option is to offer a compromise, which helps you settle back taxes with the IRS for less than you owe. This comes as an option when you are unable to pay your taxes or are facing financial hardships.

3-Currently, there is no collectible status.

If you have no source to pay off your debt, you can apply to get the bill deferred. The IRS will deem your tax debt as currently not collectible after verifying your status.

4-Penalty abatement

If you otherwise have a clean record of failing to pay taxes, you can request penalty reversal by applying for a first-time penalty abatement.

5- Hiring a tax relief company

Tax relief companies offer help to taxpayers who are in distress. Some may be legitimate, but finding a reliable source is difficult. These offers seem too good to be true.

Conclusion

Lots of companies offer tax debt relief programs; however, how many deliver is the question. You can take care of this situation in many other ways, such as seeking legal consultation, credit counseling, or IRS taxpayer advocacy, to get a better insight into your situation.

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