Knowing Your Tax Relief Options Can Help You Get Out of Tax Debt

July 10, 2012 by  Filed under: Taxes 

Having tax debt weighing on your shoulders is enough to make anyone frustrated and downright fearful of the future. Rather than live with this burden, you should consider looking into options for resolving your tax issues. With a little effort and the right help, you may be able to erase your tax debts and improve your financial situation a great deal.

Understanding Your Options

When you’re dealing with IRS back taxes, there may be a number of different approaches you can take to clear your debt. If you’re like most folks out there, you probably won’t be able to pay off your tax debts in full immediately, so you’ll need to find an alternative resolution that works for your current financial situation. One of the most popular options that taxpayers set up to resolve their tax issues is an installment agreement. This allows you to pay off your IRS back taxes in monthly payments that are affordable to you. While this can be a great option, you must get the IRS to agree to these payments, so you need to make a reasonable offer when you apply.

Another possibility that you may want to consider pursuing is an offer in compromise. This agreement will allow you to pay off your IRS debt for less than you owe, but it’s not quite as simple as it seems. You’ll need to qualify for this program and prove to the IRS that paying your entire tax debt would place a major financial burden on you, or even that some of the outstanding tax is not your responsibility. If you want to pursue this option for tax relief, you should consider hiring a professional to help you. As an offer in compromise can be a very difficult agreement to obtain, you may benefit from having the assistance of an experienced tax relief expert by your side.

Act Right Away

If you do owe money in back taxes, it’s best to try and find a resolution as soon as possible. If you don’t, you will end up adding to your tax bill because you’ll be required to pay IRS tax penalties and interest. The longer you go without paying what you owe to the IRS, the higher the total. While you may think that putting off filing or paying your taxes for a bit is no big deal, the truth of the matter is that you could end up owing a lot more than the sum of the initial debt. It’s in your best interest to work on resolving your back tax issues right away, so that you can avoid these added costs. If you can’t find a resolution on your own, you may need to consult an experienced tax advisor to get professional help.

Oswald Hermit is a money management guru and an Internet marketing specialist with Prospect Genius, a leader in affordable marketing solutions.

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