What is tax debt settlement?
One of the most common forms of debt is tax debt. There are many reasons why people wind up owing money to the IRS, including improper filing and late payment penalties. If you owe more than you can pay, tax debt settlement may be the best option for you. Tax debt settlement is similar to other forms of debt settlement. You negotiate with the IRS to reduce the amount you owe. The IRS would rather have some of that money than none of it. Tax debt settlement is a pragmatic solution that benefits both the government and the individual. You do not need a middleman to negotiate with the IRS. Some people feel intimidated by the complexities of tax law and prefer to have someone else handle the paperwork. There are many companies offering tax debt settlement services. Some of these companies promise much more than they can deliver. Be wary of anyone making claims that sound too good to be true. They probably are.
Tax debt settlement is a method of addressing problem debts without having to file for bankruptcy. Creditors agree to accept a percentage of the amount owed by a taxpayer (usually around 50% or less) to settle the account, and the remaining balance is forgiven. IRS tax debt settlement is available to individuals who find themselves indebted to the IRS. What tax debt relief methods are available to debtors? Debtors can avail themselves of the following five strategies for IRS tax debt relief: • Installment agreement • Partial payment installment agreement • Offer in compromise (i.e., making a lump sum or short term payment to pay of the IRS at a reduced dollar amount) • Not currently collectible, whereby the IRS voluntarily agrees not to collect on a tax debt for a year or so, and • Filing for bankruptcy (i.e. discharging tax debts by way of a Chapter 7 or Chapter 13 bankruptcy petition) In conclusion, when it comes to taxes, there may be no free lunch but there are discounts. A tax ded
