IRS Tax Debt Settlement Help: How to Deal with Unpaid Taxes


Although it can be an isolating feeling, many Americans are in need of IRS tax debt settlement help every year. Unpaid taxes are similar to student loan debt in the sense that they cannot be negotiated with a debt relief program. However, the Inland Revenue Service (IRS) provides different methods to help individuals who are struggling to catch-up with back taxes and money they simply don’t have.

IRS Tax Debt Settlement Help

Whilst there are no guarantees of assistance, it may be possible to get tax debt relief in five different ways. The methods are rather involved so it is normally advisable to seek guidance from a suitably qualified professional. Help with unpaid taxes could come from an offer in compromise, instalment agreement, partial payment instalment agreement, not currently collectible or through filing for bankruptcy.

Full & Partial Installment Agreement – Tax Debt Settlement Through an Installment Plan

Whilst an offer in compromise is preferred, those who are able to make a series of instalments to settle unpaid taxes will not qualify. Instead, it is expected that a suitable repayment plan will be structured to allow the money to be repaid. A partial instalment agreement is similar, except that it involves offering the IRS repayments on a set percentage of the amount owed.

Offer in Compromise – Offer to Pay a Small Percentage of Unpaid Taxes

An offer is made to pay the ‘reasonable collection potential’ and not all unpaid taxes. Whilst this may seem like a panacea, only a small percentage of offers are actually accepted. Should it be possible to clear debt via an instalment plan, this form of IRS tax debt settlement help will not be available. It can be a highly complex area so the majority of people choose to utilise the services of a tax professional.

Currently Not Collectible (CNC) – IRS Tax Debt Settlement Help

Should the individual have unpaid taxes that don’t qualify for an offer in compromise or an instalment agreement, currently not collectible status may be granted. However, that individual’s financial status will be monitored by the IRS. Should their financial status change, they will be expected to make payment.

File for Bankruptcy – Clear Unpaid Taxes

It may be possible to clear tax debts by filing for bankruptcy, but the rules are strict. Tax debts that relate to unfiled returns aren’t dischargeable. An attorney should be consulted in relation to the complex qualifying criteria. Other unsecured debts, such as unpaid credit card debt, can also be cleared by filing.

IRS Tax Debt Settlement Help from a Professional

It is important that tax debt relief is sought from a suitably qualified tax professional or bankruptcy attorney. Devising a repayment plan for unpaid tax can be something of a minefield so an expert opinion will help to ensure that the right option is selected.

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