Owing debt to the IRS is not similar to owing debt to the credit card companies and the other financial institutions. When you don’t pay your taxes for a long time, you accumulate them and this is when you start incurring debt for which the IRS may run behind your back for recuperation of the money. Just as you can settle your credit card debt, you can even settle or negotiate your IRS debt through a professional and through certain steps on your own. However, as there are debt consolidators who can help you relieve yourselves of your debt burden, you can never consolidate your IRS tax debts. Have a look at the steps taking which you can pay off your IRS tax debt and avoid a hit on your credit score.
- Calculate the total amount of money that you owe: The first step that you need to take is to calculate the total amount of money that you owe the IRS. Unless you know where exactly you stand, you can never take steps to reduce your IRS tax debt. Gather all the tax documents and the slips that have a proof of the fact that you’ve not paid off a number of bills. The IRS will only accept a debt negotiation offer after checking your present financial condition so that you don’t suffer while making the payments after a portion is waived off.
- Calculate your total income: You can even calculate your total income so that they know your affordability. The more you’re sure about your affordability, the easier it will be for the IRS to assess your payment ability and check on the amount that you should pay them back.
- Get the Offer in Compromise form: There are websites from which you can obtain the Offer in Compromise (OIC) form and you should ensure downloading this form from an authentic website so that you may complete this process lawfully.
- Fill out the form carefully: In this Offer in Compromise form, you will need to give your contact information and you should indicate the tax periods in question. You also need to show the circumstances that are keeping you from making the timely payments on your tax bills. You have to meet the low income guidelines too in order to be able to settle your IRS tax debt.
- Mail the entire thing: After you complete filling out the form, you have to mail them two checks, one for the first payment and the other for the application fee to the IRS. This will make the entire thing successful.
So, when you’re in IRS tax debt, take the above debt negotiation steps on your own so that you can avoid being harassed by the collection agencies to whom the IRS sells off your accounts.
Written by guest writer Patricia Garner.