You don’t want to fall prey to unpaid tax debt. But life happens, and you may be going through a lot of stress about how you are going to pay the tax debt. No matter what the reasons are for why you are not able to file and pay taxes on time, the IRS will not take that into account. Here are some ways you can pay off IRS tax debt, as suggested by a CPA firm in Colorado. Check out the points mentioned below.
- Firstly, if the IRS feels that you are not in the financial situation to pay off the tax debt, they can temporarily delay the collection process. This is not the best solution, but obviously, it can give you some peace of mind. You now have at least some time to pay the amount. However, this doesn’t prevent the penalties from adding up.
- Secondly, you can apply for a payment plan. The payment plan may look like an installment agreement breakdown. This can help you make a proper plan to pay off the debt. Also, the financial stress is now reduced as you have to pay in installments.
- Thirdly, if this is the first time you have missed the deadline of the taxation procedure, you can go for penalty abatement. This can also be known as one-time forgiveness. This will minimize your debt to a huge extent. But it is only applicable to those who have never offended the IRS with any activities.
- Fourth, as a business owner, you are not sure that you will be able to pay off the debt. Now, you can go for the offer in compromise. The process is difficult, and you may not qualify. So, it is suggested to get in touch with a tax professional like a CPA to help you out in the process.
- Fifth, the stress you are going through is huge, and at this difficult time, you need the help of a professional. As you consult with them, they will have a better understanding of your situation. After this, they will suggest to you the most effective ways to come out of the stressful scenario.
To sum up, these are five points you need to keep in mind if you are burdened with tax debt. And keep in mind there are professionals to help you. All you need to do is get in touch with them at the right time.