If you are unable to pay your tax debt in the USA, there are several strategies you can consider to help relieve the burden.
We will briefly discuss in this article a few options that you have if in case you ever have fallen into such situation. Here are a few options:
1. Installment agreement
You can apply for an installment agreement with the IRS, which will allow you to pay your tax debt in monthly installments over time. This can be a convenient way to manage your debt if you cannot pay the full amount upfront.
2. Offer in compromise
An Offer in Compromise is a settlement offer that allows you to pay less than the full amount owed to the IRS. The IRS will consider factors such as your income, expenses, and assets to determine if an offer in compromise is a viable option for you.
3. Hardship status
If you are facing a financial hardship, such as unemployment or a medical emergency, you can apply for hardship status with the IRS. This will temporarily suspend collection actions, allowing you time to get back on your feet and regain financial stability.
4. Penalty abatement
If you have a good record of paying your taxes on time, you may be able to have penalties removed from your tax debt. You will need to demonstrate reasonable cause for the penalties, such as illness or a natural disaster.
5. Request a hearing
If you disagree with the amount of tax debt you owe, you can request a hearing with the IRS Office of Appeals. During the hearing, you will have the opportunity to present evidence and argue your case.
It is important to remember that the IRS is not interested in ruining your financial stability. If you cannot pay your tax debt, they would rather work with you to find a solution that works for both parties. Consider seeking the help of a tax professional to guide you through the process and ensure that you are taking the best course of action for your specific situation.