| There are many ways to settle IRS back taxes. The | | | | IRS will collect if they are not made aware that the |
| only thing you do not want to do is ignore this situation. | | | | collection of taxes would cause financial hardship. If |
| When you owe money to the IRS, no matter how | | | | you can prove to the IRS that the collection of taxes |
| much it may be, you need to pay up as soon as | | | | would cause financial hardship they will put a |
| possible. This does not mean that you have to do so | | | | temporary hold on collections and allow you time to |
| all at once, though. As soon as you know your options | | | | better your financial situation before they collect. |
| for settling IRS back taxes it becomes easier to see | | | | Sometimes if your financial situation does not improve |
| what will work best for you. | | | | enough, they may never collect from you. The statute |
| Here are a few of the most common ways to settle | | | | of limitations on tax debts is 10 years and many times |
| IRS back taxes: | | | | this time period expires while the person is under |
| 1. Use a tax professional. Why do everything on your | | | | hardship and they are no longer liable for the taxes |
| own when you do not have to put yourself through | | | | owed. |
| the stress? A professional who knows how to work | | | | 5. Bankruptcy. Typically bankruptcy is not the best |
| with the IRS and settle your taxes can save you a lot | | | | settlement method to ever choose because you owe |
| of money. The job of a tax professional is to analyze | | | | taxes but sometimes it can help you settle if you owe |
| your situation, inform you as to what is going on, and | | | | other debts as well. With Chapter 7 you can discharge |
| help you make the right decisions. | | | | all taxes owed if you meet strict requirements. You will |
| 2. Installment agreement. This is one of the best ways | | | | first be required to liquidate your assets in order to put |
| to settle IRS back taxes. With an installment | | | | that money towards paying your taxes first and after |
| agreement you are allowed to pay back a small | | | | that it is a possibility that any remaining can be |
| amount of your debt each month, instead of in a single | | | | discharged. Other types of bankruptcy will require you |
| lump sum. As long as you pay the minimum on time | | | | to still pay back your taxes in a form of a payment |
| every month the IRS will consider your account to be | | | | plan. |
| in good standing. | | | | 6. Offer in compromise. This is the method that most |
| 3. Partial payment installment agreement. With a partial | | | | people who owe IRS back taxes want to consider. |
| payment installment agreement you will not be required | | | | With an offer in compromise you end up paying less |
| to make the full monthly payment that is required with | | | | to the IRS than what you actually owe. Those who |
| an installment agreement. This part pay alternative is | | | | want to settle their debt for pennies on the dollar need |
| available to those that cannot afford to pay the full | | | | to look into this option. The only downfall is that the IRS |
| amount and in order to do so they must prove to the | | | | does not accept offers from everybody. Instead, |
| IRS that they don't have the means to make the | | | | offers in compromise are only accepted roughly 10 to |
| monthly payment required with the regular form of | | | | 15 percent of the time. A tax professional can help you |
| installment agreement. | | | | decide if you qualify. |
| 4. Declare Hardship. One thing people don't realize is | | | | These three methods for settling IRS back taxes are |
| that the IRS actually does have some limits as to | | | | commonly used by taxpayers across the country. If |
| when they will collect from individuals. The IRS does | | | | you consider them all you should find your way out of |
| not want to collect from taxpayers if the collection | | | | tax debt soon enough. |
| would cause extreme financial hardship. However, the | | | | |