Tax Debt Relief – Can I Really Get Off with Pennies on the Dollar?

There are lots of commercials and advertisements out there that seem to promise the wonders of tax debt relief. They suggest sunny scenarios in which you can avoid the majority of your tax debt by only paying “pennies on the dollar.” Are those commercials legitimate? Most likely, no.

The reality is that there are many legitimate, reasonable options for tax debt relief, but you cannot expect to get a free-pass on your tax obligations. Uncle Sam, like other creditors, wants to make sure that all people honor, or do their best to honor, their tax obligations.

That said, the Internal Revenue Service (IRS) is not the malicious, fear-inducing agency that seeks to ruin a person’s financial stability as it is often caricatured to be. It cannot be said that the IRS is a “warm and fuzzy” type of government bureaucracy. Yet, it is not an organization that is looking to punish simply out of cruelty.  

Rather, the IRS is focused on obtaining the money owed to the government. In that way, it is possible to effectively deal with the IRS and negotiate a way to obtain some tax relief with the help of experienced tax debt relief attorneys in Florida. 

Approximately one in five taxpayers, about 20 percent, file a return that has a balance due of an average of $3,000.  So, if you are someone who is concerned about tax debt, then you are not alone.

What is important to remember is that choosing to merely not file your tax returns, because you are afraid of the debt, is not the way to go. It is true that the IRS has a number of rather oppressive tools in its toolbox to get people to pay their taxes, including harsh penalties and interest, liens on property, or even garnishing wages. But, the best course of action is to file your tax returns, and then contact the IRS to work out a way in which to settle your debts.  

Fortunately, there are a number of ways to obtain tax debt relief, and we will discuss those realistic options in this article. If after going through this article you would like more assistance regarding your own personal circumstances, then we invite you to call the tax debt relief attorney in Florida, Mary E. King, P.L. The Law Office of Mary E. King, P.L. can make sure that your tax issues are resolved efficiently and at the lowest cost to you. Please fill out our online contact form , or call us at 941-906-7585 today.

The concept of tax debt relief covers a wide range of options, but all options have the goal of having a taxpayer do his or her level-best to resolve all tax debts with the IRS. Typically, the tax debt relief comes in the form of payment plans, or removing some portion of a debt that a person is unable to pay, i.e., debt settlement. The appropriate option depends upon the financial picture of the taxpayer in question.

The kind of taxpayers who likely need tax debt relief include:

1. People who have financial difficulties and will likely not be able to resolve tax debt by taking out a loan, using a credit card, or accessing investment funds;
2. People who the IRS has sought collection for debts;
3. People who have neglected to file tax returns; and
4. People who have significant tax debt over $50,000.

The IRS has a number of choices on how to address issues with paying a tax debt.  

– Payment Plans

The first of the IRS options is an “installment agreement,” or payment plan. This repayment option works similar to a loan in which you pay a set amount over a period of time, up to six years, to resolve the debt. Like any other loan, interest is tacked on to the tax debt, but at least the initiation of an installment plan removes any accrual of penalties.  

If your debt is lower than $50,000, it is possible for you to obtain an installment plan online through IRS.gov.

Overall, the benefit of an installment agreement is that you can avoid the specter of wage garnishments, tax liens , or other collection activities.  

 – Offer in Compromise

When the IRS concludes that you are unable to pay the full amount of a debt, either now or over a period of time, you then may qualify for an Offer in Compromise. An Offer in Compromise is an agreement between you and the IRS to allow you to resolve the debt for less than what you owe.  

In order to qualify, the IRS will ask for information to consider your ability to pay based on income, expenses, and net worth. Offers in Compromise can be paid either in a lump sum, or in monthly payments.  

You should be aware that Offers in Compromise sound great, but they are very hard to obtain. Accordingly, it is not something you should rely on as a sure-fire way to obtain tax debt relief.  

Other Tax Debt Relief Options 

In particularly dire circumstances, a taxpayer may be able to eliminate older tax debt by filing for a Chapter 7 personal bankruptcy. However, you should be aware that filing for bankruptcy is an extreme option that should only be pursued with care. It will most likely have long-lasting implications for your personal credit rating and your financial picture for years after. 

One other way to discharge a tax debt is through the statute of limitations on tax debt. Specifically, if the IRS is unable to collect a tax debt after 10 years, then the tax debt is erased.  

The Law Office of Mary King P.L. offers complete IRS problem solving services including all areas from tax debt settlement to planning the most efficient tax strategy for individuals and businesses. Call our tax debt relief attorneys in Florida today to schedule an initial consultation. With years of experience as tax debt relief attorneys in Florida, the Law Office of Mary E. King can make sure that your tax issues are resolved in your favor. Fill out our online contact form , or call us at 941-906-7585.