According to statistics, more than 60% of households didn’t pay any individual tax in 2021. This statistic is mainly driven by the fact that many Americans lost their livelihoods due to the initial lockdowns. These accumulated back taxes led to a 50% increase in audits by the Internal Revenue Service (IRS). The IRS is demonized for being ruthless, but if there is a willingness to pay on the part of the taxpayer, the government agency can compromise and agree to a mutually beneficial IRS installment agreement. There are multiple ways through which you can resolve back tax payments with the IRS. We will go through some of them in this article. Let’s begin!
1. IRS Installment agreement
If a taxpayer can’t pay their taxes in total, which includes tax and interest, then they can get into an IRS installment agreement. This agreement breaks down the payable amount into small payable installments, making it easier for the taxpayer to pay. The IRS offers long-term and short-term agreements, but these agreements can only be taken advantage of by taxpayers who qualify. To be eligible for an IRS installment agreement, individuals must owe $50,000 or less and must have filed all the returns. If you want to learn whether you qualify for an IRS installment agreement in Dallas, you can reach out to a Dallas IRS lawyer for quick solutions.
2. Offer in compromise
An offer in compromise is an option for taxpayers who are incapable of paying their full tax liability, or doing so will make them economically deprived. The IRS ensures that the taxpayer is incapable of paying their taxes by looking at their income, expenses, and asset equity. The IRS suggests that the taxpayer should exhaust all options before applying for an offer in compromise. More than half of the compromise requests are rejected. Even if the request gets approved, the taxpayer has to pay the maximum amount of debt they can pay within a reasonable period.
When trying to resolve back tax payments, you should always remember to seek the help of a professional to ensure that the entire process goes through seamlessly. An IRS payment agreement is a more feasible option than an offer in compromise, but both of them have qualification criteria that you need to fulfill. If you’re looking for IRS debt relief in Fort Worth or IRS tax help for Fort Worth, then you can reach out to a seasoned Fort Worth IRS lawyer. IRS lawyers have the know-how to get you deals that make it easier for you to pay your tax debt.