The New Year is right around the corner. If you owe the IRS, you don't want to bring a Tax Debt into 2010. Make it a New Years Resolution to resolve your Tax Debt issues. Here's a quick guide to the best ways to make a debt free life a reality.
Offer in Compromise or "Pennies on the Dollar" - You've probably heard of the infamous Offer in Compromise, sometimes referred to as an IRS "Pennies on the Dollar" settlement deal. Chances are high that you will not qualify to have your Tax Debt settled for "Pennies on the Dollar", but you might qualify for an "Offer in Compromise" there is truly no way you can pay your IRS Tax Debt in full before the Statute of Limitations on your Debt expires.
Installment Agreement An IRS Installment Agreement allows you to pay your Tax Debt in monthly payments. This is the most common method for paying your IRS Tax Debt. One downside, however, is that monthly interest continues to accrue on your Tax Debt each month. You're also expected to pay a set amount each month until the debt is paid in full.
IRS Hardship Plan If you are facing dire financial straits, you might qualify for a "Hardship Plan". A "Hardship Plan" will place your account on a temporary hold from collection actions so you can get your finances back in order.
IRS Penalty Abatement Another rare batch of people will qualify to have the penalties on their Tax Debt removed. This applies for individuals that didn't pay their taxes on time due to an emergency situation. Situations that qualify include natural disasters or extended hospital stays. IRS Penalty Abatement does not remove the entire Tax Debt, it merely removes the penalties attached to it.
IRS Forms You'll Need to Know:
-IRS Form 665: Offer in Compromise
-IRS Form 9465: Installment Agreement Request
-IRS Form 843: Claim for Refund and Request for Abatement
-IRS Form 433-A: Collection Information Statement for Wage Earners and Self-Employed Individuals
-IRS Form 433-F: Collection Information Statement
Whatever plan you choose, act fast! Don't bring your Tax Debt into another year. It's time to act and get your Tax Debt issues behind you.