How To Resolve Your Tax Debt

Posted on by LBS Tax

Taxes are something that every law abiding, working American citizen must pay. As part of your citizenship in this great country, you must pay taxes to the government in order to partake of things like roads and bridges, public education, and welfare services. Your taxes often help to fund these programs, and without them, the economy will quickly falter. But there are also times when it can seem impossible to pay what the government says you owe, and it’s frustrating to see your hard earned money being spent by someone else. If you owe the IRS money, and fear that your tax debt will send you financially spinning out of control, there are several ways you can resolve this debt without damaging your credit. See what we office in for Tax Problem Resolution.

Payment Options

The IRS would prefer that you write a check for the entire amount of what you owe, but recognize that this is impossible at times. In order to help those who don’t have the liquid cash to pay the fees, the IRS offers monthly payment options to citizens. You can sign an installment agreement with the IRS that sets up a schedule for you to pay off your taxes, similar to how you would take out an automobile loan or a home loan. Paying your taxes monthly makes them much more manageable, and increases the chances of the IRS getting their money.

If you are temporarily unable to pay your taxes because of circumstances beyond your control, the IRS may offer you a temporary delay or offer in compromise for your tax debt. These options allow you to take a small break in between payments, while still guaranteeing that you are within the bounds of the law.

Borrowing Options

For those who simply wish to pay the full amount and forget about it, but are lacking in the cash to do so, there are several options from which you can borrow the money to pay your debt. Many consumers will choose to take out cash advances on credit cards, bank loans for IRS debt, or borrow against a retirement plan or life insurance policy. When you are considering these options, consider the interest rate you are paying, and whether it will save you money to work out a monthly agreement with the IRS, rather than paying high interest on a credit card or bank loan, or jeopardizing your future financial stability.

If you own other assets, such as real estate, stocks, savings bonds, or savings accounts, you can also choose to liquidate these items and use the cash to pay your tax debt. Again, this is a process that must be considered carefully to ensure that you are choosing the most profitable option for you.

Hire A Professional

When you find yourself in debt to the IRS, the options available to you are many. They can also be difficult to understand unless you have the education and experience to understand the process. Your best chance is to hire a tax professional to prepare your taxes, and then to negotiate with the IRS how you will pay them. A tax professional can advise you on the best way for you to settle your IRS debt, limit your stress about the money you owe, and give you peace of mind about your financial future.

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