Dealing With the Collection Division of the IRS – Tax Debt Strategies
There’s five and only five strategies for getting out of debt.
- Installment agreement: a monthly payment plan for paying off the IRS.
- Partial payment installment agreement: a fairly new debt management program where you have a long term payment plan to pay off the IRS at a reduced dollar amount.
- Offer in Compromise: a program where you can settle your tax debts for less than what you owe. Requires making a lump sum or short term payment plan to pay off the IRS at a reduced dollar amount.
- Not currently collectible: a program where the IRS voluntarily agrees not to collect on the tax debt for a year or so.
- Filing bankruptcy: discharge your tax debts under the strict rules of a Chapter 7 or 13 bankruptcy petition.
There’s no “secret sauce” in paying off tax debts. These are the only five ways of getting out from under the IRS’ aggressive debt collection tactics. If a tax pro promises you that you can save “pennies on the dollar” through an offer in compromise, that person is probably more interested in selling you something you don’t need instead of focusing on your unique financial situation and determining what the best course of action is for you.