5 simple ways to settle your IRS tax debts
  • December 16, 2019
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There are two things in life that we cannot possibly escape – death and taxes. If you have an outstanding tax bill, it’s not unusual to feel uneasy and possibly stressed out until you get the burden off your back. Although the annual tax lien filed by the IRS has fallen by more than 50%, according to the IRS data book, there were more than 14 million open tax debt cases against businesses and individuals that entered 2018. Despite being in one of the biggest economies in the world, a lot of Americans find it hard to pay their taxes on time. If you are experiencing the same problem, it does not mean the end of the world. There are certain steps that you can take to mitigate the impact that unpaid taxes can have on you. Read on.

Don’t Ignore It

Even if you ignore the issue, the IRS certainly will not. If you are unable to pay your taxes at the moment, you must not forget to file the return or for an extension on time. The IRS levies a 5% penalty on the tax you owe per month up to a maximum of 25% of the balance. When you are unable to the full tax amount, the IRS levies an underpayment penalty of 0.5% to 1% per month of the balance you owe up to 25% on your concurring underpayments. Failing to file your taxes or underpaying will rapidly increase the debt you owe to the IRS.

Related Blog: Looking For Ways to Settle Your IRS Debt at a Lesser Amount? Here’s Help!

Understand Your Situation

The IRS does not forgive debtors. For individuals experiencing true financial hardships, Form 656 or an application for an “offer in compromise” may be a lifesaver. You need to understand your situation before going ahead to file for an “offer in compromise”. If the IRS determines that you have been making enough income and have assets, you may not be eligible for an “offer in compromise”.

Handling Tax Debt on Your Own

If your tax debt is below $10,000, you might want to handle the issue on your own, rather than pay someone to help you out. You can file Form 9465, which is an IRS application to issue an installment payment plan on your outstanding debt. The IRS will agree to issue the service to taxpayers who owe less than $10,000. The plan allows you to pay off the debt along with interest and penalties over 36 months.

Hiring an Attorney

If you owe the IRS more than $10,000, hiring an attorney could be in your best interest. There are different payment plans to extinguish the outstanding debt but an experienced attorney can help you get better terms. It is of the utmost importance that you pay attention to the attorney that you hire. Many people are scammed by people claiming that they can help settle tax debts for a fraction of what is owed. Before hiring an attorney, make sure that you learn about their background and experience in helping people with similar cases.

Related Blog: 4 Signs to Help You Avoid IRS Debt Tax Relief Scams?

Streamlining the Debt

Taxpayers owing large debts can arrange an agreement for streamlined installments. The Fresh Start Program qualifies taxpayers with up to $100,000 in debt for such an agreement. However, there are certain prerequisites that you need to meet to qualify for this agreement plan.

Wrap Up

If you are stuck in a scenario requiring you to clear your IRS tax debts. The above-listed steps can give you a basic rundown of how you can pay your tax debts. Filing tax returns and clearing tax debts can be a cumbersome process, which is why hiring an IRS tax debt attorney can be helpful. If you are looking for IRS tax debt help, Nick Nemeth has got you covered. Fill out our Contact Form or simply call us at (972) 426-2553 for a free consultation.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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