3 Tax Debt Solutions When You Can’t Pay the IRS

August 10, 2015

Being pursued by any creditor can be stressful. When that creditor is the IRS, however, the situation can be more intense. This is because the IRS can bring your financial situation to a complete halt, cutting you off from your bank accounts and income (when deemed necessary).

So, if you have a tax debt that you are not able to pay, here are a few things you can do to resolve the situation.

Overwhelmed by Tax Debt? Try…

1 – Asking for a break.

Here are some tax debt solutions for those who owe the IRS and can’t immediately pay, a Denver bankruptcy attorney explains.

Here are some tax debt solutions for those who owe the IRS and can’t immediately pay, a Denver bankruptcy attorney explains.

In some situations, the IRS may grant leniency to people who can’t pay their tax bills, waiving assessed penalties when a taxpayer has a history of paying his or her taxes on time. Although the IRS won’t be forthcoming in informing you of this, ask about it. The IRS has to waive a first-time penalty for previously compliant taxpayers.

If you don’t qualify for a break on your bill (maybe because your record of paying taxes is less than perfect), then you may still qualify for the IRS “Fresh Start Program,” which provides a few options for individuals and businesses struggling to pay their taxes.

2 – Attempting to negotiate a structured payment plan.

Another option for resolving tax debt is to contact the IRS and attempt to work out a payment plan. Although this can be an intimidating thought, remember that the IRS wants to collect your money and its agents want to figure out how much you can pay so that you do pay your taxes.

Before you contact the IRS directly, however, it’s important to consult with a lawyer to devise a payment plan that will work for you – and that the IRS would be willing to accept.

3 – Trying to your other debt obligations.

One more option for people who can’t pay their tax debt is to try to reduce their other debt obligations. The idea is that, if less money is going towards other debts, more can be put towards the tax debt. Some options for reducing other debt obligations can include:

  • Debt settlement – Creditors may be willing to agree to you paying less than you owe them if you can pay them in full within a short period of time.
  • Debt consolidation – This can be risky for some people, so make sure you understand the potential drawbacks before you sign a debt consolidation loan.
  • Bankruptcy – Although bankruptcy won’t get rid of your tax debt, it can help you eliminate other debt, such as credit card debt, medical bill debt, etc.

When You Have a Tax Bill, Do NOT…

  • Avoid the bill and try to ignore the IRS – This will only make your problems bigger because the IRS, like an elephant, never forgets. It will eventually come after you if you don’t pay your tax bill.
  • Avoid filing income taxes – Again, this will only exacerbate your problems.
Contact Denver Bankruptcy Attorney Jon B. Clarke

If you are overwhelmed by debt, contact trusted Denver Bankruptcy Attorney Jon B. Clarke for experienced help pursuing your best debt relief option.

To get answers from an experienced and esteemed lawyer, contact us today. We encourage you to complete our Business or Consumer Debtor Analysis Form. You can also get answers from Denver Bankruptcy Attorney Jon B. Clarke by calling our firm at (866) 916-3950 or by emailing us using the contact form on this page.

From our offices based in Denver, Castle Rock and Greenwood village, we take pride in providing people throughout the state of Colorado with the highest quality debt relief legal services.

Categories: Debt Relief, Tax Debt