For many people who owe back tax to the IRS on their unpaid federal dues to Uncle Sam, the dollar amount continues to grow each day. It starts with the original IRS debt and then gets worse because the IRS tacks on a failure to pay penalty with compounding interest. If a person owes the back tax because they failed to file their federal return, then the person is hit with a failure to file penalty in addition to the failure to pay penalty and the compounding interest.
It doesn’t take long before a person gets sucked into the Internal Revenue Service’s Asset Chewing Septic tank, which is more commonly known as IRS Collections. The official name that is used is the Automated Collection System or the abbreviated version called ACS. However, the phrase Asset Chewing Septic tank is an appropriate tag because that’s what happens to one’s assets when they are in IRS collections. The Internal Revenue Service first starts to chew on someone’s paycheck and bank accounts. If they don’t get enough cash calories by eating someone’s paycheck or bank account, then they can begin to chew on larger assets like a person’s home.
Fortunately, there are many relief options available to someone who owes back tax to the IRS. Because there are so many options available to get relief from Uncle Sam, a person should hire a professional firm to better ensure that they get the best relief option available to them. These options are not magic pills because if a person can pay their federal tax obligation, they will pay it. However; if someone cannot pay the money that is owed, then they can get some relief under the tax code.
So here are some of the relief possibilities for the people who cannot pay the back tax that they owe. They could get set up on a payment plan that will pay Uncle Sam off over time. They could qualify for relief with an offer in compromise, which is the most commonly talked about option. This option essentially allows someone to pay a reduced amount on his or her debt. A person might also take advantage of a partial payment installment agreement that basically has the person paying only a part of the amount they owe to the IRS through a payment plan. A person might also qualify to get classified in an uncollectible status through the currently not collectible option.
All of the relief options that are available for people to pay their back tax require the help of someone who understands the IRS process. All of the relief options, and a few more options not mentioned here come attached with requirements, qualifications and risks under the regulations of the Internal Revenue Service. Thus, it is important that a person hires someone who understands them before opting to use them. To qualify for any relief, the IRS will want to know about a person’s ability to pay. This will involve the IRS seeking details about a person’s assets and income. A person just doesn’t want to disclose that kind of information to the IRS without first seeking the help of a professional.