The following is a guest post by Sheryl Fabia, an in-house writer for Franklin Debt Relief. She writes articles on various financial matters and has them published across the web.
The good news for people who find themselves in this situation is that the IRS offers some inventive options to taxpayers with a large burden. They understand that some people will struggle to pay off the full amount of their debt and need more time to pay.
For the reasons listed above, the government offers three primary options for taxpayers who can't make the initial bill.
Installment Agreements: One of the most popular ways to pay off the full balance of your tax debt over time is through an installment agreement. Taxpayers can propose a system where they pay off their entire debt in monthly installments over a period of time. The amount of the payments and length of time will be determined by the IRS and the taxpayer. The idea here is to put a taxpayer on a plan that he or she can handle. The IRS is interested in getting their money back. They also want to do it in a responsible way. This is what installment agreements are all about.
Partial Payment Installment Agreements: Some people have a portion of the money necessary for paying off their debt. They just don't have the entire thing when the due date comes. These people can sometimes work out a partial payment installment agreement. This arrangement is similar to the installment agreement mentioned above. A taxpayer will pay off what he or she can at the beginning. He will then pay off the remaining portion each month for a certain period of time. As long as taxpayers are willing to make the payments on time, they can usually stay in good standing with the IRS by using this type of plan.
Offer to Compromise: A less common way to get ours from under tax debt is by settling the debt with the IRS. An offer in compromise is a program where taxpayers can get rid of the entire tax burden by paying less than they owe. It should go without saying that the government does not simply offer this opportunity to every taxpayer. The debt usually has to be old. It helps if the taxpayer has special circumstances that make it a huge burden to pay the entire bill.
Many people will enter into debt consolidation programs to give them the money to make a settlement offer. The settlement process is a negotiation. The IRS is more likely to accept those offers that come close to satisfying the entire debt burden.
The IRS understands that some people will fall behind on their taxes. The good thing is that they offer plenty of options for people with this issue. Taxpayers who have fallen behind should consider the various ways of getting out from under their burden.
Photo By: John Morgan