Tax Debt Consolidation Solution

tax debt consolidation

It is not shameful to get behind on your taxes. Surprising medical expenses and family emergencies happen, and you can find yourself stuffed to the bottom with a retroactive tax debt before you know it. Have you ever wondered if you can consolidate all your debts as people consolidate all their credit card debts? Well, yes you can. It just does not work in the same way as credit card debt consolidation. If you dismiss them, unpaid taxes can allow the IRS to confiscate assets, garnish your wages and place foreclosures on your home or property. If you have difficulties with several invoices for IRS back taxes, you are not alone. In 2017, there were 937,514 taxpayers with delinquent accounts.

Can You Negotiate Your Tax Debt With the IRS?

Americans do not pay $ 458 billion a year in taxes, and the IRS wants to get their money back in any way possible. Your tax debt can be negotiated with the IRS, however, it rarely goes from dollars to cents. One way to consolidate your IRS debt is to get an offer in commitment. This is an agreement between the taxpayer and the IRS to settle the tax liability of the taxpayer for less than what is owed. It is likely that the IRS will accept a reduced amount if there is no way you can return the money you owe now or in the foreseeable future. Unless paying the IRS causes financial difficulties, doubts about the amount owed, or you can not pay the full amount within a reasonable time, it is unlikely that the IRS will give you an offer of commitment.

Here are the requirements for an offer in commitment:

The IRS has doubts about the amount you can recover in the near future. The IRS calls this "doubt as to the ability to collect" and, in general, is linked to a business or individual that has lost all income and is likely to never get enough profits to pay their back taxes.

Due to exceptional circumstances, the payment of your total tax bill could cause an "economic hardship" or be "unfair" or "inequitable". The IRS is not going to force you or your company to give money that you do not have or that would leave you on the street.

It's weird, but the IRS is capable of making mistakes. You can file Form 656-L if you or your company have "doubts about the responsibility of payment". If the IRS did not process your taxes correctly and the amount you think you owe is incorrect, it will reduce the amount or eliminate it entirely according to your circumstances.

If you plan to negotiate with the IRS to reduce the amount of taxes you owe or to obtain fiscal consolidation, the best thing you can do is hire a specialized and professional attorney or CPA attorney. Obtaining an IRS commitment offer requires a lot of time, paperwork and correspondence. Talking with a professional (before you apply) can tell you if you can qualify before you spend time in the process.

The Nature of Unpaid Taxes

Before you can proceed with the understanding of fiscal consolidation, it is important to know that each tax debt you accumulate with the IRS is a balance that is assigned to a specific year. Each year's debt generates its own fines and interest (which means that the IRS does not consolidate all your debt as it accumulates over the years). Fortunately, the IRS will allow you to consolidate back taxes for several years of delinquency.

Solutions

If you do not believe that the IRS will accept an offer in commitment, installment payment agreements are a great alternative and the most common way to achieve fiscal consolidation with the IRS. Instead of paying each of your tax debts separately, the IRS will allow you to make a monthly payment instead of paying a single lump sum. Depending on the size of your debt, these payments can be extended up to 6 years. Despite fines and interest that will continue to accrue during the term of your debt, you do not have to pay several different delivery agreements at the same time. The IRS will group all your tax debts for several years in a single partial delivery, providing the convenience of a monthly tax bill.

It is important to be alert to any new tax liabilities after you consolidate. This process does not suspend the rest of your tax obligations; In any case, you will be required to submit new taxes for each fiscal year that comes with the fiscal consolidation of your IRS. If you do not pay new taxes, you can endanger your existing agreement with the IRS. For example, if you or your company have a delivery agreement, and you become delinquent in the next year's tax bill, your IRS payment plan will be invalidated. This could force you to start the whole process, only that the IRS may not be as flexible or unwilling to work with you the second time. One way to avoid this is to hire a professional tax or accounting representative to ensure that you are not making mistakes in your IRS consolidation.

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