How to Deal With Tax Debt
If you have tax debt, ignoring it will lead to worse consequences. Below are some things you can do to help lessen the penalties:
- File your taxes even if you cannot pay them.
- Request an installment agreement.
- Delay payment.
- Settle for less than what you owe via "offer in compromise".
It is important to file your taxes even if you are not able to pay them off. Not filing will result in late fees or worse, jail time and fines for tax evasion. If you cannot pay your taxes, the IRS does offer solutions!
If you are eligible, you may opt for an installment agreement or a long-term payment plan. This is best for people who owe less than $50,000 (including penalties and interest) and those who need more than 120 days to resolve the balance. Note that this option can add penalties and interest to your debt.
Delaying payment may be an option for you if you can prove that paying the tax debt will stop you from affording your basic living expenses. However, the debt will continue to accrue interest and penalties as well.
Do you have tax debt? For guidance, reach out to our tax debt lawyer serving Woodland Hills, Los Angeles, and Bakersfield. Contact us online or call (818) 696-4443 to schedule a free consultation. We have more than 25 years of experience and are ready to help you!