Owing back taxes is stressful, especially when the IRS begins the collection process. If you're like most people, you probably feel like you don't have any options. Many people assume that they have to pay large debts to the IRS all at once. However, you still have rights. Learn how to deal with IRS debt collections without adding a lot of additional stress to your life.
Don't Ignore An IRS Collection Notice
It's common for people to ignore problems that overwhelm them, but the last thing that you want to do is ignore a collection notice from the IRS. You need to face the problem head on, otherwise you might back yourself into a wall. When you receive your collection notice, contact a tax resolution firm to help you resolve the issue. Once you've talked to the tax resolution firm about your options, call the IRS to let them know that you're working on a solution to pay off your debt.
Payment Plan or Offer in Compromise?
The IRS offers payment plans for those who owe back taxes. If you can afford to pay off the entire amount in payments, you should call the IRS to discuss a payment plan. However, if you can't afford to pay off the balance, even in installments, you should consider filing an Offer in Compromise. An Offer in Compromise is an agreement between you and the IRS that settles your debt for less than the balance owed. Unfortunately, the IRS will not accept an Offer in Compromise if they determine that you can afford to make installment payments, which is why you need to discuss your options with a tax resolution firm before you make any decisions.
Make Sure You Tax Filings Are Current
When people get behind on their taxes, they often assume that they shouldn't file taxes for a new year until they get caught up. However, this isn't the case. It's important that you file taxes every year. If you haven't filed because you owe the IRS money, you need to file your taxes before you try to resolve your back taxes. This shows that you're taking responsibility for what you owe, and you're trying to do the right thing. The IRS is more likely to work with you if you play by the rules.
Receiving an IRS collection notice in the mail is stressful, but you shouldn't panic. You don't need to pay the entire balance in full as soon as you receive the notice. Instead, take a few deep breaths and contact a tax resolution firm such as Horizon Tax Relief to help you weigh your options.