Every taxpayer has an obligation to file his or her returns each April and pay whatever they owe to the government on time. Sometimes, however, meeting this important obligation can be difficult or impossible especially if you are already experiencing financial difficulties. Rather than avoid this duty altogether, you could seek out remedies that will put you on the right side of the IRS without compromising your income or your assets. By considering all of your options for tax debt relief help New York taxpayers like you can settle what you owe in a timely and legal manner.
You may be able to pay something toward your IRS obligation but not the full amount. In this instance, an Offer in Compromise could be the best solution for you. This choice, dubbed an OIC, basically lets you make an offer or to compromise with the government to pay a lump sum on the obligation. The lump sum will not be the actual owed amount, however.
Before the IRS will accept an OIC, it expects you to make a reasonable offer that reflects what you actually earn and how much your assets are worth. If you earn a reasonable income and have assets like real estate at your disposal, you cannot offer a few hundred dollars and expect the IRS to take it. You have to offer a sum that is reasonable for your financial means but will still leave you with money on which to live.
The next choice that might be suggested to you is a payment agreement. Just like how you would pay on a line of credit or a loan, you can make monthly payments on your IRS obligation. To use this option, you have to fill out the right paperwork found on the IRS website.
Most installment agreements are set up to last no longer than six years. During that time, you essentially pay off your debt bit by bit until it is paid off in full. It also reflects positively on your credit and can boost your credit score in some instances.
However, some people just simply cannot afford to make any kind of payments at all. They live paycheck to paycheck and barely have enough to cover housing costs, groceries, and other necessities. In this instance, you can ask the IRS to put your account in CNC status. CNC status means Currently Not Collectible, meaning you have no financial means to settle the account. Your debt will still incur penalties and interest.
When you seek out advice and counsel on your IRS debt, you may ask how old the debt actually is. By law, the government can only pursue collection on past balances for 10 years. Once a debt is 10 years or older, it must be written off by the government, and the taxpayer forgiven for the obligation.
By knowing the choices available to you, you can make a proactive decision regarding your tax debt and what kind of help you want to pursue. You take the upper hand to stop penalties and interest. You also can determine how fast or slow the amount is paid off in full, releasing you from any further duty to the government. Your income and assets will come into play during the process.
You may be able to pay something toward your IRS obligation but not the full amount. In this instance, an Offer in Compromise could be the best solution for you. This choice, dubbed an OIC, basically lets you make an offer or to compromise with the government to pay a lump sum on the obligation. The lump sum will not be the actual owed amount, however.
Before the IRS will accept an OIC, it expects you to make a reasonable offer that reflects what you actually earn and how much your assets are worth. If you earn a reasonable income and have assets like real estate at your disposal, you cannot offer a few hundred dollars and expect the IRS to take it. You have to offer a sum that is reasonable for your financial means but will still leave you with money on which to live.
The next choice that might be suggested to you is a payment agreement. Just like how you would pay on a line of credit or a loan, you can make monthly payments on your IRS obligation. To use this option, you have to fill out the right paperwork found on the IRS website.
Most installment agreements are set up to last no longer than six years. During that time, you essentially pay off your debt bit by bit until it is paid off in full. It also reflects positively on your credit and can boost your credit score in some instances.
However, some people just simply cannot afford to make any kind of payments at all. They live paycheck to paycheck and barely have enough to cover housing costs, groceries, and other necessities. In this instance, you can ask the IRS to put your account in CNC status. CNC status means Currently Not Collectible, meaning you have no financial means to settle the account. Your debt will still incur penalties and interest.
When you seek out advice and counsel on your IRS debt, you may ask how old the debt actually is. By law, the government can only pursue collection on past balances for 10 years. Once a debt is 10 years or older, it must be written off by the government, and the taxpayer forgiven for the obligation.
By knowing the choices available to you, you can make a proactive decision regarding your tax debt and what kind of help you want to pursue. You take the upper hand to stop penalties and interest. You also can determine how fast or slow the amount is paid off in full, releasing you from any further duty to the government. Your income and assets will come into play during the process.
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