How to Settle Your Back Tax Debt
Do you owe a large amount of back taxes to the IRS? If so, you may wonder if you’ll ever be able to discharge your debt. While the simplest way to clear a tax debt is to pay it in full, this may not be possible, especially if you’re currently facing a financial crisis. The good news is that there are options to help taxpayers settle their back tax debts. However, many individuals need to get help to pursue a tax debt settlement Los Angeles residents can count on.
Tax Debt Settlement Options
The IRS offers a few ways for taxpayers to settle their back tax debt. These include the following:
Repayment Plans – In many cases, taxpayers can begin repaying their back taxes through an installment agreement. This arrangement allows individuals to repay their tax bill in monthly increments over a period of up to three years. Depending on the size of the debt, the IRS may even consider extending the total repayment period to six years. To request an installment plan, taxpayers can complete Form 9465 and submit it directly to the IRS.
Offers in Compromise – The IRS occasionally grants taxpayers the option to settle their outstanding debt for pennies on the dollar. This arrangement is called an offer in compromise and it is available for individuals who have financial concerns that legitimately prevent them from ever being able to repay their debts.
Amending Past Returns – If you’re facing a tax debt from a return that is a few years old, it may be worth your time to re-examine it for any possible errors. You can even take the completed return to a qualified tax preparer or attorney who can review it and amend it, if necessary. If your return contains errors, you may find that your tax bill can be lowered substantially.
Qualifying for Tax Debt Relief
While some tax debt settlement options are available to everyone, a few require meeting certain qualifications. For example, if you plan to request an offer in compromise, you’ll have to convince the IRS that you cannot possibly repay the tax debt now or at any point in the future. Since it can be very difficult to prove this, the IRS does not grant many of these requests each year.
If you’re dealing with back tax problems Los Angeles residents fear, you can get help by speaking with a qualified tax attorney or advisor.