Dealing With IRS Tax Debt: IRS Statute of Limitations- You have 5 Options For Giving IRS Tax Debt the Boot
Get the IRS Tax Debt Facts: There's a lot of ludicrous ideas out there about IRS Tax Debt. So you need to know the cold hard facts. Don't let unreliable people tell you that settling tax debt is "Easy" or that there's "tons" of ways to pay off the IRS. Because it's not true. Working with the IRS is hard. Filling out IRS paperwork is daunting. And there are only 5 real options for handling your IRS Debt.
1. Wait for IRS Statute of Limitations to Expire: Bad idea! The IRS Statute of Limitations on your debt will not expire for 10 years. And sometimes, the IRS Statute of Limitations are extended (like if you file for an "Offer in Compromise.") And while you're waiting for the time limit on the IRS Statute of Limitations to expire the IRS can collect on your debt by force with Tax Liens, Levies, and seizures. Don't give them the opportunity to do this. It will not pay to ignore your debt. However, be mindful of when your IRS Statute of Limitations will end. Perhaps your IRS Statute of Limitations are set to expire very soon. In that case, simply set up a payment plan and wait for the debt to expire, or stress the need for an Offer in Compromise before the IRS Statute of Limitations expires.
2. Pay in Full: If there is any way you can actually pay in full on your IRS Tax Debt, do it! Do not submit an "Offer in Compromise" if you have money in the bank to pay for your IRS Tax Debt. Your IRS Hitman has access to your bank account. If they see you have the money to pay, they will tell you to pay in full.
3. Settle It: The IRS gives you the chance to submit an "Offer in Compromise." You're basically settling your debt for a lower amount. Very few people are actually accepted for this program. And barely anyone has their offer accepted for "Pennies on the Dollar." But if you are in a truly desperate situation, you might want to see if an "Offer in Compromise" is an option for you. Remember, if you can prove you cannot pay you tax debt before your IRS Statute of Limitations expires, you can
4. IRS Suspended Collections: If you are in a situation displaying true Financial Hardship, prove it to get IRS Suspended Collections. With an IRS Suspended Collections status on your account, the IRS will stop the collections process for a limited amount of time so you can get your finances back in order. They will determine the amount of time based on your situation, and check up on you periodically while your account is on IRS Suspended Collections to see if your situation has changed yet.
5. Pay Monthly: You can pay the IRS Tax Debt monthly. You have to enter into an "Installment Agreement" with the IRS to do this. The IRS will take a close look at all your finances and assets. If you're approved to pay monthly, they choose the amount you pay each month. Then you are locked into a binding contract, stating that you must pay a certain amount monthly. And defaulting can have harsh results.
Still Hope to remove IRS Tax Debt: Sorry if I'm making things seem hopeless. Yes, paying off your IRS Debt is hard. The IRS's system of ruthless Hit-men doesn't help the matter. But there are ways to get your debt taken care of. None of the options I have described are easy to do. But you have to do them if you don't want to remain in debt to the IRS forever. But if done correctly, you can use IRS Statute of Limitations or IRS Suspended Collections to resolve your IRS tax debt.
