Do not ignore the IRS when you owe tax debt.
The tax agency allows payment plans.
People who default on tax debt can suffer severe consequences.
Go to the IRS website to set up a payment plan or call the agency.
The One Thing You Should Never Do If You Have Tax Debt
(NewsReady.com) – Scientific studies have proven debt can cause a person to fall into depression and grapple with crushing anxiety. Not being able to pay something that needs to be paid is terrible. Sometimes, it can lead to a person completely shutting down and pretending the debt doesn’t exist. That’s never a good idea, but it’s especially bad when the debt in question is from the Internal Revenue Service (IRS).
Owing the IRS money can scare some people. After all, how many stories have people heard about the tax agency being pure evil? Certainly, it’s not pleasant to owe the federal government money, but it’s also not as scary as television and movies portray it.
Hire a Professional
First of all, unless a person is a trained accountant, they probably shouldn’t do their taxes themselves – especially if they’re self-employed or own a business. That’s because tax professionals know all the ins and outs of tax law. They also know which deductibles a person qualifies for and how to properly reduce the tax debt they will owe the IRS. There are programs that allow an average person to do their own taxes, but it’s better to leave it to a professional.
Don’t Ignore Tax Debt
There is a stereotype about the IRS that’s true: the agency doesn’t play. If a person owes a debt to the agency, they will collect it one way or another, and it might be very unpleasant for the American who owes the money. For example, the IRS can seize bank accounts, paychecks, tax checks, and assets from people who owe money and have not paid it. That’s not an experience anyone wants to have, so it’s much better to just deal with it and move on. Fortunately, the IRS has a lot of options available to help people pay off their debts.
Make a Plan
Generally speaking, the IRS isn’t unreasonable. If someone finds out they owe money, there are a number of ways they can handle it. First, they can pay the debt in full by the filing deadline. Traditionally, that was April 15, but it has moved in recent years, so be sure to find out the exact date.
If someone doesn’t have the money to pay it in full, that’s okay. The IRS offers both long-term and short-term payment plans for people who owe money. For long-term plans, the IRS allows the debt holder to pay an amount that works for them until it’s paid in full. A short-term plan divides the money up into equal parts to have it paid off by a set date. The agency must first approve the payment plan and, once it’s approved, the person who owes the debt must meet the agreement. To set up a payment plan, go HERE.
The agency also offers what’s called an Offer in Compromise to allow them to pay less than the full amount they owe. The agency suggests using the Offer in Compromise Pre-Qualifier tool to find out if this option works for them.
To reach the IRS directly, call 800-829-1040. Agents are on hand to discuss all of the options available and help decide which plan is the best option based on a person’s situation.
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