Contrary to popular belief, dealing with the IRS is not impossible. Although owing the IRS money can be stressful, it does not mean that you will end up in a battle. While the IRS does maintain the right to garnish wages or bank account funds to collect on a debt, most taxpayers find that they never have to experience such actions by following a few simple rules.
Speak Up
The biggest mistake people make when dealing with unpaid taxes is failing to contact the IRS. Most people hide or avoid contacting the IRS for fear of what they will say. In fact, failing to contact the IRS is the worst thing you can do when facing tax debt problems. The more you stay away or ignore IRS collection attempts, the more you put yourself on the path to more serious IRS consequences.
Whether your tax debts are recent or a few years old, you can bet on one thing: they will find out and they will collect on their money. Taxpayers who contact the IRS in effort to resolve tax debts are viewed more favorably than one who ducks calls and collection letters. If you want the best chance at negotiating a deal, you must get in contact with the IRS. Contacting the IRS by letter is a good way to initiate the process, as it provides you with a paper trail to prove your efforts are in good faith.
Explain Yourself
Once you contact the IRS it is a good idea to explain your situation. The IRS needs to know why you haven't paid your tax liabilities or why you don't think you can afford to pay them now. In either case, you want to present a picture of your financial situation to help illustrate your financial hardship. Whether you lost a job, got injured and can't work, experienced a severe medical condition or lost a spouse; give the IRS an idea of what you are going through. Give them the benefit of the doubt that they will trust your explanation.
The IRS isn't as cold and unforgiving as one would think. They understand that things can happen to prevent someone from being able to fulfill their tax duties. You don't have to give away personal details in your explanation letter, but do provide enough detail to provide a description of the trouble you are facing. If you can't pay your other bills or are facing foreclosure, include this information as well.
Compromise
While you may not think the IRS is willing to compromise, they are actually quite good about helping taxpayers. Remember that tax debts are rarely eligible for bankruptcy or other debt management plans, but they can be repaid over time by negotiating with the IRS directly. You may be eligible to obtain an installment plan agreement, in which you repay your debts over a period of two to three years. The IRS also offers a program to help those under severe financial hardships called an Offer In Compromise. This program allows the IRS to negotiate a settlement agreement to lower the amount of tax debt owed.
Speak Up
The biggest mistake people make when dealing with unpaid taxes is failing to contact the IRS. Most people hide or avoid contacting the IRS for fear of what they will say. In fact, failing to contact the IRS is the worst thing you can do when facing tax debt problems. The more you stay away or ignore IRS collection attempts, the more you put yourself on the path to more serious IRS consequences.
Whether your tax debts are recent or a few years old, you can bet on one thing: they will find out and they will collect on their money. Taxpayers who contact the IRS in effort to resolve tax debts are viewed more favorably than one who ducks calls and collection letters. If you want the best chance at negotiating a deal, you must get in contact with the IRS. Contacting the IRS by letter is a good way to initiate the process, as it provides you with a paper trail to prove your efforts are in good faith.
Explain Yourself
Once you contact the IRS it is a good idea to explain your situation. The IRS needs to know why you haven't paid your tax liabilities or why you don't think you can afford to pay them now. In either case, you want to present a picture of your financial situation to help illustrate your financial hardship. Whether you lost a job, got injured and can't work, experienced a severe medical condition or lost a spouse; give the IRS an idea of what you are going through. Give them the benefit of the doubt that they will trust your explanation.
The IRS isn't as cold and unforgiving as one would think. They understand that things can happen to prevent someone from being able to fulfill their tax duties. You don't have to give away personal details in your explanation letter, but do provide enough detail to provide a description of the trouble you are facing. If you can't pay your other bills or are facing foreclosure, include this information as well.
Compromise
While you may not think the IRS is willing to compromise, they are actually quite good about helping taxpayers. Remember that tax debts are rarely eligible for bankruptcy or other debt management plans, but they can be repaid over time by negotiating with the IRS directly. You may be eligible to obtain an installment plan agreement, in which you repay your debts over a period of two to three years. The IRS also offers a program to help those under severe financial hardships called an Offer In Compromise. This program allows the IRS to negotiate a settlement agreement to lower the amount of tax debt owed.