We have all feared in the back of our minds the IRS Tax Dilema: what happens if you can't pay the taxes you owe. Admit it, you have worried about that at least once in your lifetime.
Should you find that you cannot pay your income tax bill, don't panic. It may surprise you to find many options available to you. Despite the image that the IRS is the Evil Empire, it is not in their mandate to hound taxpayers and drive them into bankruptcy. It is in the government's best interest that taxes are collected and that taxpayers are allowed to lead productive and happy lives. However, there are a few factors that you need to keep in mind when it comes to income taxes and tax debt.
First off, the IRS has ten years to collect back taxes from the assessment date. However, there are certain events that can occur that can extend this time period, such as bankruptcy. You must find out, either from a tax attorney or the IRS, if you have unpaid back taxes, the amount of those taxes, and the applicable date that they expire.
An Offer in Compromise (OIC) could solve your tax problem. While usually filed by a tax lawyer, an individual taxpayer can work with the IRS to file on OIC. The offer requires the taxpayer to prove that he or she will not be able to pay the full back taxes over four or five years even if the IRS forced a sale of all assets belonging to the taxpayer. Just like other available options, an offer in compromise can only be accepted if a taxpayer has filed all of his or her back tax returns. Just like an Installment Agreement (or a credit card), an OIC will only be accepted once a taxpayer has prepared and filed all of his or her tax returns.
If you cannot afford to make any payments on your IRS back taxes you may qualify for "Currently Not Collectible" status with the IRS. To qualify for Currently Not Collectible status you must prove (among other things) that your monthly income is less than your monthly living expenses. Currently Not Collectible status requires the taxpayer to disclose all of his or her financial information. The IRS is normally only willing to consider Currently Not Collectible status once a taxpayer has filed all of his or her tax returns. Taxpayers have many solutions available to them, but most don't know what they are or how they can qualify for them. Honesty with the IRS and your tax attorney (if you use one) is critical in your quest to find tax relief from the IRS.
About the Author:
www.irstaxrelif.biz
Article Originally Published On: http://www.articlesnatch.com
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