Millions of Americans owe thousands of dollars in back taxes to the IRS. If you’re looking for tax debt relief, the good news is there are options available.
There are various tax relief companies that can work with you and the Internal Revenue Service to manage the debt you owe. These companies provide tax debt help primarily through speaking with the IRS on your behalf and setting up a repayment plan that works for you.
IRS debt forgiveness is another option that you may be eligible for.
If you can prove to the IRS that you cannot pay the taxes that you owe or that paying would put you in financial strain, you could qualify for “offer in compromise” (OIC).
OIC lets you settle your debt with the IRS for less than what you owe. A representative would evaluate the following before approving IRS debt relief:
- Your income
- Your assets and their equity (subtracting anything you owe)
- Your costs and expenses
It is important to know the difference between IRS tax debt forgiveness programs and those that are scamming you. If a company demands payment before any work has been done, don’t continue working with them.
Another popular scam are companies telling you you may qualify for an IRS hardship program. According to the FTC, most taxpayers don’t qualify for this so make sure you do your own research before handing over any money.
Another way to pay down your tax debt is an installment agreement. You will complete this with your tax returns, and include the Form 9465. In most cases, the IRS will approve your agreement if you owe less than $10,000 and have filed your tax returns in the last five years.