Methods Of Paying Your Tax Bill
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Most taxpayers receive a refund. But some have a balance due to the IRS or other taxing authority and the amount can vary from a manageable amount to something a bit scary. That raises the question, "What can I do about my tax debt?"
The IRS and other taxing authorities are often very aggressive collectors and they generally have legal powers not available to your other creditors. When an individual or a company owes tax debt, the government, wants payment. Even if there's no money or less than a desired amount available, they will still try to get payment from you. Despite being massive and seemingly all-powerful institutions, however, these organizations usually have to try to work with people.
Different Ways to Pay
Know the facts and investigate your options. Let's say you wish to pay all your taxes but handing over the full amount in one payment is either impossible or would make things really tight for you. There are ways to pay. It will cost you as there are almost always penalties for late payment but the costs can usually be managed.
Here are some options for repaying or otherwise dealing with your tax debt:
• An offer in compromise
• Installment Agreements
• Hardship Deferrals
• Bankruptcy Discharges
• Legal Limitations
An offer in compromise is where you tell the IRS you can't pay the bill in full but you can pay X dollars. They'll investigate and may negotiate. If you can agree, you'll pay the new liability.
You could pay off your debt in installments just like you make payments on any other type of contract. There will be a charge for this option but it can clear your debt and not all in one payment.
If you have hit the rocks financially you can raise the issue of hardship. Creditors know they can't get blood out of a stone and detailed documentation of your circumstances is required, but this is an option.
Bankruptcy is not a good option for some taxpayers, but in some circumstances, it is the best or only way out. If you file for bankruptcy and it is (discharged) completed, there are several downsides but your debt to the IRS will not be one of them.
In general, once a tax assessment is made, the IRS has a legal limitation of 10 years in which to collect their money. Sometimes cases get mislaid or forgotten. If time has gone by and your tax debt is not paid, under most conditions, once 10 years has elapsed, so does your obligation to pay.
In some cases the statute may differ, depending on what method for handling the debt you are evaluating.
This article seeks to give you a general idea of what is involved with a tax debt to the IRS or other taxing authorities. For more detailed expert advice, a visit to a tax lawyer is highly recommended.
*This article does not constitute legal advice and does nt establish an attorney-client relationship.
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Author Resource:-
Thomas W. Lynch is an Oak Lawn Bankruptcy attorney who specializes in Debt, Tax and other Legal Problems. Thomas W. Lynch and his legal team are committed to helping people resolve their problems and get them back on track. Visit http://www.thomaswlynchpc.com for more information.
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By :
Jessie Stone
Submitted
2010-12-13 02:14:03 |
Article From Article Mayhem
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