Negotiating with IRS
If you owe a tax debt and you cannot pay the full amount then there are ways of negotiating with IRS. When you think of the IRS you do not necessarily think of someone you can negotiate with but that is simply not true. There are numerous ways that you can make a settlement that you can live with you just have to know what your options are and how to negotiate.
- You should not talk too much when negotiating with IRS. The reason is that the IRS agents are experts at drawing as much information as possible from taxpayers. All questions you are asked should be truthfully answered, but you should keep them succinct, short and to the point. Do not disclose too much or discuss or elaborate your personal life.
- You can make arrangements to pay in installments. If you agree that you owe the debt but you just cannot pay the lump sum then you can make arrangements to pay monthly on an installment plan. This will help you manage your debt in a feasible way while still paying what you owe. There will be interest charged when you pay on an installment plan so that should be considered when setting up the plan. You may want to negotiate the amount of interest you have to pay.
- When it comes to paying your tax liability, do not make promises that you cannot keep. If you are asked if you can pay $300 every month on your tax balance, and you know that you can only pay less than $150, you should let the IRS agents know.
- If your tax debt is more that you can handle then you can hire a tax settlement company to negotiate for you. They can negotiate a deal for you and they have a team of tax professionals to get you the lowest amount possible. The down side to this is that they will charge for the service and you have to figure their cost into how much they can save you.
- You can also request a compromise if you meet the requirements. Basically the requirements are if you cannot pay and will never be able to pay, there is some doubt whether you owe the tax debt or paying the debt would put you in a financial bind and cause undue hardship. There are also several other factors like you cannot be in bankruptcy proceedings. You also have to file your tax returns from past years and pay your payroll taxes if you have a business.
- You have to recognize the tax debt and negotiate your tax debt within a reasonable amount of time or they can levy your bank account and garnish your wages.
When you owe tax debt the worst thing that you can do is ignore it because it will not go away. You can work out a solution when you negotiate with IRS. You do not have to hide from the tax debt and there are avenues that you can take to make sure that the debt is taken care of.