Many individuals who owe a substantial amount in back taxes are also facing significant financial difficulties, as financial troubles are one of the more common reasons for a person to initially fall into a tax debt. Facing both a large federal tax debt and financial struggles at the same time can be remarkably stressful on a person and can leave them very worried about the future. Such individuals may feel like their financial struggles will make it impossible to address the debt and impossible to avoid the wrath of the Internal Revenue Service.
However, there are methods out there through which a person who is facing financial hard times who has a large amount of back-due federal taxes may be able to resolve their tax debt. One such method is reaching a settlement with the IRS.
There are several different types of settlement arrangements the IRS sometimes reaches with individuals with a tax debt who, for financial reasons, are currently unable to fully pay off their debt. For one, under special circumstances, the IRS may allow a person’s tax debt to be put into “currently not collectible” status for a time, which can give a person a break for a while from facing active collection efforts from the IRS. Also, sometimes, agreements are able to be reached with the IRS in which a person is allowed to pay off their debt in installments. Another settlement option that is sometimes available is to reach an offer in compromise with the IRS: this is an agreement in which the IRS allows a tax debt to be resolved in exchange for a payment that is less than the full amount of the debt.
Many different things can impact what settlement options a person with a tax debt may have and what options are the best fit for them.
Our firm understands how complicated matters involving federal tax debts can be and how much anxiety such matters can cause for individuals. We can help individuals who have found themselves facing a high amount of back-due federal taxes look into whether they have any potential settlement options available and can assist them in pursuing a settlement if that is the route they decide they want to take.