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Strategies for Eliminating IRS Debt

September 4th

Saddled with IRS debt from past tax returns? If so, it can feel like there is no way out. Any tax debt lawyer can tell you that IRS debt is not dischargeable in bankruptcy, meaning even that powerful tool will not help you escape crushing tax debt. The good news is that there are answers out there.

Retain a Tax Debt Lawyer

A tax debt lawyer is a licensed professional and among the few people permitted to present cases to the IRS. A tax debt lawyer will work to get you out from under your IRS debt without destroying your finances and all you have worked hard to build. In many cases, this is achieved through an offer in compromise.

An offer in compromise is a petition to the IRS to pay a portion of the debt owed while being forgiven the remainder. It is the actual process behind many tax debt lawyers’ television commercial advertising IRS debt settlements of pennies on the dollar. In fact, such drastic reductions are uncommon, but the offer in compromise will result in a significantly reduced overall payment than the amount owed in IRS debt.

The offer in compromise means that you will be obliged to make a lump sum payment up front, so it is not always the best option for those who may be lacking the liquid assets to make such a payment. Other common negotiating strategies for reducing IRS debt include agreements to pay in installments, and the ‘not currently collectible’ designation, whereby the IRS agrees not to pursue tax debt collection for an agreed-upon period. The best course of action is to consult a tax debt lawyer and determine together your best strategy going forward.

 
 
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