Tax, we all pay it and we love complaining about it. It is because of the taxes we pay that the government can spend for projects such as road construction and street lighting and also to finance the many government agencies of our country. Tax is a fee charged by our government on products, income or activity. There are two kinds of tax. These are the direct tax and indirect tax. A direct tax is the fee charged for personal or corporate income while an indirect tax is a fee charged on the price of any product or service. The amount of tax charged differs in different states.
If you have back taxes or some amount of your tax left unpaid, the IRS or Internal Revenue Service will start collecting taxes that you have not paid. Most of us go through tough times, especially with the recent market crash. Most of us had lost jobs and not much jobs are available, some can not even acquire new jobs which is one of the reasons some of us have difficulty in paying our bills and one of them is our taxes while others had been delinquent in paying taxes.
The good news is you can settle your taxes with the IRS. If you can pay your back taxes in full and you do not have any dispute on it, it is best that you do so. Tax settlement is when you as a taxpayer applies for one of the programs that IRS has for those struggling with their tax debts or for those who have valid reasons to lessen the penalties incurred in their tax debts. Ideally the IRS would prefer that the whole amount of taxes owed is paid in full however the IRS will look into your financial situation and make exceptions depending on your financial circumstances.
There are important things that you should iron out before you apply for tax settlement with the IRS. The first thing that you need to make sure of is that you have filed any of your unfiled tax returns. If the IRS has already filed these for you, it is best that you hire a tax attorney to decrease the amount of taxes through an amended return.
To apply for tax settlements with the IRS, the first thing to decide on is what type of tax settlement you should apply for. You can save yourself the trouble of understanding taxes and figuring out tax settlements by hiring a tax attorney as they know better than you do. It may come with a price however tax attorneys are professionals who can decide what could be the most suited tax settlement for your situation.
If you can not afford a tax attorney then you should have a basic understanding of what are the types of tax settlements. A tax settlement is either paying for less than what you owe or paying in instalments. If you are looking to pay your taxes for less than you owed you should consider these tax settlement options which are offer in compromise, partial payment instalment agreement and penalty abatement. If you are not qualified to settle your taxes for less than what you owe instalment agreement and uncollectible status or financial hardship are the types of settlements that you should look into.
It is very important that you settle your debts with the IRS. The IRS will collect these unpaid taxes no matter what your situation is. However you should also take the time to let them know about your financial situation and apply for tax settlements they have available for people like you who are struggling with their tax payments. Make sure that once you have made an agreement with them that you abide by this agreement and pay duly on the terms agreed on.
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