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4 IRS Debt Forgiveness Options to Consider

April 26th

With the IRS’s recent expansion of their taxpayer forgiveness program, more and more middle-class Americans are able to resolve their IRS debt issues. Whether they approach the situation on their own or work with a tax debt lawyer, Americans are able to work out their debts because of the tax forgiveness program. This is a major benefit for Americans who are struggling to make multiple bill payments in the midst of a rough economy.

Forgiveness of IRS Debt

Using a tax debt lawyer can help you navigate through all the different options of IRS debt forgiveness. However, should you decide to pursue this on your own, it’s important to know all the different options available. Each IRS debt forgiveness program is tied to a specific situation that taxpayers might face.

1. Uncollectible Status. If you are unemployed or underemployed and just don’t have the means to pay your IRS debt, then file for this status. This will momentarily halt payments until you are able to begin repaying the IRS debt. This is only a temporary solution.
2. Offer in Compromise. With this option, you can settle your IRS debt for less than you actually owe! This process has saved taxpayers over a billion dollars since it was first implemented. Working with a tax debt lawyer exponentially increases the chance of this plan working.
3. Chapter 13 bankruptcy. Did you know that income taxes are dischargeable through bankruptcy? Through Chapter 13, your IRS debt is reorganized so that you can make manageable payments. However, because the Offer in Compromise has become wildly popular, the Chapter 13 option isn’t as used as it once was.
4. Chapter 7 bankruptcy. Certain taxes from your IRS debt can be discharged completely. A tax debt lawyer can help you understand which taxes are eligible for a Chapter 7 bankruptcy and which ones aren’t. This is typically the very last resort for solving tax debt problems.


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