As tax time approaches many families are feeling a sense of dread. Not everyone gets a refund during tax season and owe the IRS instead. Since tax debts are a specific type of debt, traditional debt relief strategies may not be effective. It is important to understand certain tax debt facts for finding relief.
Tax Debt Facts For Finding Relief
The IRS does offer some ways for you to resolve your debt directly. You may be able to repay your debt in a series of payments, called an Installment Agreement. Installment agreements space out your debt payments over a period of 2 to 5 years. You repay the debt in full by making a monthly payment each month. To qualify you must owe less than $50,000, including fees.
If you do not qualify for an Installment Agreement you may be able to settle your debt with a lump sum. An Offer In Compromise is a debt settlement arrangement with the IRS. This option is for those who cannot afford to repay their debt. An offer in compromise is usually only given to those with significant income issues or those who may not be eligible to work.
For anyone suffering with debt problems beyond tax debt, bankruptcy may seem like an option. There are certain requirements that must be met in order to include a tax debt in bankruptcy. First, the tax debts must be income taxes. Payroll taxes or fraud penalties are not eligible. Second, the tax debts must be at least three years old and have a tax return on file with the IRS. Last, the tax debts must have been assessed by the IRS at least 240 days before you file for bankruptcy.
If you are considering filing for bankruptcy to eliminate any type of debt, contact bankruptcy lawyers Citrus Heights. Finding debt relief is a serious matter and one that requires the help of an experienced professional.