Empty Wallets: There's no jobs out there. Even if you're a college graduate, the pickings are slim. More and more people are having to settle for low income jobs until something better comes along. So what can you do when your pay is low and your IRS debt is huge? First, don't panic. And Second, stop ignoring it. There are still solutions for getting your huge Tax Debt off of your back.
No Way Out: Let me give you a friendly warning. When I was an IRS Hitman, I heard all kinds of excuses. Usually, people told me, "I just don't have the money to pay!" But that never phased me. You'll have to do better than that. You need the tools to actually fight your debt, not just complain about it.
You Need to know that the IRS can not make you go without basic needs. Your basic needs include food, housing, basic clothing, transportation, tools for work, and school supplies/books. If paying any amount of money on your Tax Debt would make you go without any of those basic needs, you do not have to pay your Tax Debt.
Fight Back: Here are good options for people with low incomes.
Hardship Plan: This is also known as "Suspended Collections." The IRS will carefully weigh the amount of money you make versus the amount of money you are allowed to have for your basic needs. If the amount of money you make is only enough to satisfy your basic needs, you'll qualify. The IRS will then suspend collections activities. The amount of time varies, sometimes you'll get over a year to get your finances in order. But this is NOT a permanent solution for your debt. Once the grace period is up, the IRS collection efforts will resume full force.
Offer in Compromise: You can settle your IRS debt for less. But don't think this is easy to do. You'll have to provide lots of evidence proving that there is no way you can ever pay your debt in full. Then you have to take a look at the 44 page long application and fill everything out. When you send the document in, you have to send 20% of your offer. If you make a mistake and your offer is not approved, the money is nonrefundable. If you are not approved the first time, consider getting professional help the second time around.
Be Careful: Applying for a hardship plan or an offer in compromise is hard work, and is even harder to qualify for, but they are the best options for people with little to no income. Remember, if you ignore your debt; interest and penalties will continue to accrue on your account. Don't let the IRS extort you for all you're worth. Face the music, and pay it off!
Have a great weekend everyone, I'll be back in the office bright and early Monday morning to help you with your Tax Debt questions!