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Consider Your Tax Resolution Options Before Dealing With Back Tax Issues

April 10, 2012 | Comments: 0 | Views: 175

When you owe money to the IRS, paying it off should be your top priority. However, you should consider what your options are for resolving your debt before you choose a course of action.

If you owe money to the IRS for taxes from years past, it's likely that this burden is causing you to experience both stress and frustration. In order to lift the weight of back taxes off your shoulders, you should make an effort to pay off these debts as soon as you possibly can. Before you do, though, it's in your best interest to explore what options you have for paying off your outstanding tax liabilities.

Before you can start paying the IRS for taxes that you owe, it's a great idea to explore your options for tax resolution. Most people don't have enough money to pay off the full amount of what they owe, so choosing the best tax settlement option is key. If you proceed appropriately, you can solve your tax issues without too much hassle, and you can get back on track with your finances.

Offers in Compromise

When you have serious tax issues, you should consider your options for filing an offer in compromise. An offer in compromise will allow you to settle your tax debts for less than what you actually owe, so this can be a great option for those who are struggling financially and owe lots in back taxes. It's good for you to keep in mind that your offer in compromise must make sense and be agreeable to the IRS for it to be accepted. Typically, an offer in compromise is only accepted if it's the most the IRS can hope to collect on your tax debts, as a result of the large size of the owed money compared to your assets. If the amount that you owe in back taxes is quite large and your offer in compromise is low, then your offer may not be accepted.

Installment Agreements

Another resolution option that you should consider when you are dealing with tax problems is setting up an installment agreement. An installment agreement will allow you to pay off your tax debts in monthly payments. Although this can be a great way for you to deal with your tax debts, you need to understand that it comes with a cost. You will have to pay existing penalties and continuing interest on the balance of your IRS back taxes, and this could add a significant amount to your tax bill. If you want to avoid paying these fees on your IRS back taxes, then you may want to opt for another type of resolution.

Secure Help from a Professional

Figuring out what you should do about your tax problems may require the help of a tax attorney. While you can file offers in compromise and arrange installment agreements on your own, it may be difficult for you to get the outcome that you are hoping for. If, however, you hire a tax attorney or other tax specialist to help you with this process, you could have a much better chance of finding an easy and affordable way to resolve your tax troubles.

Penny Jones is a financial guru and an Internet marketer for Prospect Genius, a leader in search engine optimization services.

Source: EzineArticles
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