Five Ways to Get Out of Tax Debt

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Post on 29-Jul-2015



Economy & Finance

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<p> 1. 5 Ways to Get out of Debt with the IRS IRS tax debt can be stressful and overwhelming. Understand your options for tax debt resolution. 2. Tax Debt Options When it comes to resolving your tax debt, always remember that you have options. While the IRS would like you to pay in full as soon as possible, it is important that you resolve your tax debt in a way that best suits your situation. 3. Installment Agreements Installment agreements allow taxpayers to pay their tax debt over time. Typically, the taxpayer pays a set monthly payment until the tax debt is paid in full. If the individual owes less than $50,000 and plans to pay in full, they are not required to provide information on income and expenses. 4. Partial Payment Installment Agreements (PPIA) PPIAs are installment agreements that allow the taxpayer to pay only a partial amount of their tax debt. In this plan, the monthly installment is based on the taxpayers ability to pay, rather than the amount of the debt and the time given to repay it. Essentially, the taxpayer pays as much as their financial situation reasonably allows until the debt expires. Financial disclosure is required. 5. Offer in Compromise In this program, you and the IRS agree to settle the debt for less than what is owed. The taxpayer can pay either in a lump sum or in installments over no more than 24 months. Full financial disclosure is required. The IRS will examine income, assets and expenses in order to determine eligibility. 6. Currently Not Collectible If taxpayer has absolutely no ability to pay their tax debt, the IRS can declare a taxpayer Currently Not Collectible (CNC). When a taxpayer is in CNC, the IRS stops all collection activities. The IRS will periodically review the taxpayers financial situation. 7. Filing Bankruptcy When you file bankruptcy, an automatic stay on collection temporarily stops the IRS from collecting your tax debt. While tax debt can be discharged in Chapter 7 bankruptcy, it must first meet specific eligibility factors. In many cases, tax debt does not qualify to be discharged. If tax debt is not discharged in bankruptcy, after the bankruptcy ends, the IRS will resume collection actions. 8. To Learn More Visit Or call (800) 691-5390 </p>