Is Your Financial Hardship Preventing You from Paying Off Your Tax Dues? Read This!

Tax Dues With with Nick Nemeth

IRS expects the taxpayers to pay their taxes on time. In case a taxpayer is unable to pay their taxes, the IRS may levy a severe penalty on them. The penalty may include late payment fees and interest on the due tax amount.  If you have been facing a tax issue with the IRS, it is advisable to have it resolved as soon as possible to avoid any legal action. The good news is that if you are willing to pay the due taxes, but are unable to do so immediately because of a financial hardship, the IRS offers debt relief options as a part of IRS’s fresh start initiative to repay the debt in partial or full. Let’s look at some of the IRS debt relief options available for taxpayers.

Request Offer in Compromise (OIC)

OIC is an agreement between the IRS and the taxpayers, allowing taxpayers with genuine financial hardship to settle their tax dues for an amount less than what is due. The OIC, unlike an IRS Tax Installment Agreement that allows taxpayers to pay their tax dues in installments, aims at collecting the maximum amount possible in the least amount of time. This means the Offer in Compromise allows taxpayers to pay a part of their taxes with a condition that the amount needs to be paid in a reasonable period.

Apply for an IRS Tax Installment Agreement

The IRS allows taxpayers with outstanding dues to pay their tax dues over a given time period through monthly installments. As a part of the IRS’s Fresh Start Initiative Program, the limit of tax amount due to be eligible for an IRS tax installment agreement has gone up to $50,000. The maximum amount of time allowed to pay the taxes through installments is 72 months. Taxpayers who wish to apply for the plan, can fill out Form 433-A or Form 433-F. Another way to apply is to go online to the official website of the IRS and use the Online Payment Agreement tool.

Avoid Tax Liens

The IRS’s Fresh Start Initiative has relaxed the IRS’s criterion of filing a Notice of Federal Tax Lien against a tax defaulter by increasing the amount a taxpayer can owe to $10,000. If a taxpayer fulfills certain criteria, they can request the IRS to withdraw the notice by filling out Form-12277. Taxpayers may also request a withdrawal of notice if they are paying their outstanding dues through a Direct Debit Installment Agreement. Note – In some cases the IRS may file a Notice of Federal Tax Lien, even if the tax amount due is less than $10,000.

If you have any questions about your particular IRS tax debt issue, attorney Nick Nemeth, with his  proven track record in dealing with tax law intricacies, can guide you on how to get an Offer In Compromise approved if you meet all the criteria. To reach us, and schedule your free consultation with Nick Nemeth, please fill out our contact form and we will get back to your shortly.