The only time that you may find joy in receiving a communication from the IRS is if you are getting a tax refund. Otherwise, typically no one enjoys it when the Internal Revenue Service comes calling. If you owe back taxes, this burden can put a lot of stress on you and your finances. However, the pros here at Maggi Tax are here today with some helpful tips on dealing with taking care of back tax debt.
If you are in the situation mentioned above, the good news is that you may qualify for government assistance via programs that help citizens to pay off the past taxes that they owe. Traditionally, these programs allow you and the IRS to work together to find a workable settlement amount and a payment plan to rid you of this past tax debt. (Side note: If you find yourself in a situation where you know you will be unable to pay your upcoming taxes, it is best to formulate a plan before the dreaded April 15th tax deadline.)
The most commonly utilized government-sponsored tax debt relief programs are as follows:
OFFER IN COMPROMISE (OIC): With this agreement, the IRS may agree to settle your debt for far less than you owe, thus saving you a chunk of change in the long run.
INNOCENT SPOUSE RELIEF: This debt relief option requires you to prove your innocence and lack of knowledge of errors or tax fraud on a jointly filed return. However, if you can meet the burden of proof, your liability may be reduced or eliminated.
INSTALLMENT AGREEMENTS (IA): If you have less than $50,000 of back tax debts, including penalties and interest, you very well may qualify to pay off your debt in installments of the course of up to 72 months. This can make the payoff more manageable for sure.
CURRENTLY NOT COLLECTABLE (CNC): Currently not collectible is only an option if you can prove to the IRS that paying your back taxes will prevent you from covering your basic living expenses. If this sounds like your situation, filing for CNC status can gain you valuable time to make a payoff plan without constant harassment from debt collectors.
If you find yourself in a bind over past tax debt that is overdue, we invite you to reach out to the professionals at Maggi Tax. We are intimately familiar with tax laws and tax debt relief options such as the programs listed above. We are more than happy to sit down with you and perform a thorough review of your financial situation to help you formulate the best plan of attack to eliminate tax debt while still leaving you with income to enjoy life. Don’t let back taxes that you owe hang over your head any longer. Reach out to our fantastic Maggi Tax team today!