The Secrets to Settling a Huge Tax Debt – 4 Ways!

Due to financial challenges or poor decisions, you can find yourself having a huge tax debt . It is not easy to pay a huge tax debt at once. However, there are many options you can use to clear your debt with the IRS. If you don’t come up with a payment plan, the IRS can seize your assets or take any other action against you to recover their money. To avoid all the complications, here are 4 ways to help you settle your tax debt comfortably.

1.Installment agreement

If your tax debt is huge that you can’t pay it at once, the IRS is ready to talk with you. You can negotiate for a comfortable monthly payment plan. This will give you a chance to pay your debt in months, until you clear it. Agreeing to payment plan shows that you are committed to clear the debt, and the IRS may not take further action against you if you honor the agreement.

2.Try partial payment installment agreement

This is a new tax debt management program that allows you to have a long term payment plan. However, the program can allow you to pay off the debt at a reduced dollar amount. Although it looks like installment agreement, the program gives you more time to clear your debt, and with the help of a good tax attorney or tax expert, your tax debt can be reduced depending on your financial situation.

3.Consider “Offer in Compromise”

This is another program that can help you clear your debt comfortably, either by paying it in lump sum or in a short tem payment plan. However, the program can allow you to pay what you can afford to the IRS. But you must explain why you can’t be able to make full payment to qualify. More to that, you can pay your tax debt a reduced dollar amount. This can be the plan for you and if you qualify for the program you can save thousands of dollars in taxes, interests and penalties.

4.Use your savings to clear the tax debt

If you find yourself with a huge tax debt, you have no option but to pay up. If you don’t go to the IRS for a negotiation of a payment plan, the IRS can take enforcement collection actions such as wage garnishments , seizure of assets, among others. If you don’t pay up soon, the tax debt will grow. You can avoid all that by using your savings to pay up the tax debt.

Final Words

Letting your tax debt grow is not a good option. If you can, you should pay up the debt to avoid penalties and interests that can make the debt grow much bigger. Also, consider the above options and you will clear your debt and have no problem with the tax collection agency. Paying up will help avoid some embarrassment enforcement collection actions from the IRS like asset seizure, wage garnishment, among others.