You should consult an experienced company for effective tax solutions. In the event you owe money to Internal Revenue Service (IRS) and not in a position to pay back, you can consider all the options for tax debt settlement and repayment method. A growing number of people have experienced tax liabilities and financial hardship. You will face a tax liability or not, it all depends on your current financial condition. IRS states that if you can prove insolvency during the tax year, no income tax will be liable on you. If your debts exceed your assets, you will probably not face any tax liability.
Simply deduct the liabilities amount from the assets amount to see whether you qualify for insolvency or not. Most people can’t afford to pay bills and they consider debt settlement. The most important aspect is your financial well-being and peace of mind. It’s a better to contact good companies to determine your tax liability. If you are unable to pay your tax debt settlement, then the IRS can go ahead to claim your properties and valuable assets. To avoid that, here are some of the options:-
Payment in Installments
On the basis of Installment Agreement, you can repay your debt in equal monthly payments. You are given the option to pay a particular amount each month. The procedure of repayment in monthly installments goes on, till you are able to settle your bills. There are penalties and interests associated with this repayment option and you will be spending more money. This is a most common method utilized by taxpayers and it gives them longer time to fulfill their payments.
The best choice is to pay the full amount. You can borrow money from your friends or family members, and other banks or financial institutions. Full payment helps to eradicate the penalties and more charges. A small unpaid amount could create more problems in future. It may lead to a harder and troublesome tax debt settlement arrangement.
You can utilize your credit card to handle your IRS tax debt settlement amount. In the event your credit card has sufficient credit limit and you can live with your credit card’s interest, then you can easily pay off your existing IRS tax debts. Credit cards cannot levy deductions against your salary account or savings bank account.
Compromise is favored by most people to repay their accumulated debt. By way of compromise, you must satisfy and meet the required criteria such as economic hardship, and your inability to pay. The IRS reviews every point before coming to a compromise.
There are many companies offering IRS tax debt settlement help. Some of these are attorney firms that specialize in tax related matters and the law governing the same. Choosing the right company to help you with IRS tax debt settlement is the best solution.
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