IRS Taxes and Debt Consolidation

IRS TAX RELIEF OPTIONS

You have a number of choices when you have to deal with IRS debt which you can utilize to improve the chances of not getting into problems with the IRS. You need to know about these choices and be better informed to take full advantage of them. If you are unable to understand specific aspects, you can always fall back to take the advice of tax experts.

Some of the options are as under:
Setting up an Installment agreement with the IRS
The IRS is aware that not all can make lump sum payments and settle the taxes they owe in full at one go. They therefore are willing to discuss and arrive at a plan that allows staggered payment which is affordable and agreeable to the tax payer. This is a win-win situation for both the individual as well as the IRS. You need to sign an agreement though and the advantage is that if you fulfill your payment obligations on time. The IRS will not levy charges and extra interest.

Partial Payment Installment Option

This option is similar to the installment agreement except that the individual need not pay the entire amount due at one go as the review is only once in 2 years. In between, if the financial situation improves, the agreement can be closed.

Offer in Compromise

This is an understanding reached between the individual and IRS, which enables the individual to pay less than what he owes. This is normally not acceptable to IRS, but they agree to it as a last resort, since they know that it is better to get something than nothing at all. They do however try to offer the plans of installed agreement and partial payment before agreeing to this.

You however, have to fulfill certain criteria to qualify for an Offer in Compromise Plan:

• If IRS is not sure about your total liability figures
• If IRS feels that you are in no position to make the due payment.
• If above two constraints are not there, but the individual is able to convince the IRS that the payment of the taxes can create huge issues that would not be fair.

You may need the help of a tax expert to apply for an OIC.

Innocent Spouse Relief
This relief is for those who have been burdened with a tax debt due to the mistake or carelessness of their wife. This is applicable only for those who have filed a joint tax plan. There are conditions that need to be met here also:

• When you filed for joint return, you were unaware of the tax being undeclared.
• You were unaware that your wife had hidden certain items pertaining to the payment of tax.

You need to fill out IRS form 8857 to find out if you qualify for this and the help of a tax expert can also be sought by you.