Debt Consolidation Blog

5 Ways to Get Out of Tax Debt

Guest article written by Jason Holmes

If you have accumulated tax debt and therefore spending sleepless nights then it’s high time that you consider the options of getting out of tax debt. There are mainly five options through which you can get out of debt. You need to choose the method that suits your current financial situation.

The five methods that can help you to get out of tax debt

Installment Agreement
The Internal Revenue Service of US (IRS) is aware of the fact that it is not possible for all individuals to pay the entire tax amount altogether. So, IRS has constructed some payment plans with the help of which IRS will be able to collect the unpaid tax in installments. The Installment Agreements provided by IRS give you the opportunity to pay the taxes in small affordable amounts over a certain period of time.

In order to enter such Installment Agreement, you need to fill up a form namely Form 9465. This form can be downloaded from the IRS website or you can contact the number mentioned on your tax bill in order to receive the instructions. If you go for Installment Agreement then it is better to pay off the entire tax amount through installments. It can be mentioned here, that Installment Agreement carries some associated fees.

Partial Payment Installment Agreement
This method of getting out of tax debt is quite similar with the first method. The main difference is that, in case of Partial Payment Installment Agreement, you do not require to pay the entire tax amount. You as a taxpayer will be subjected to a financial review every two years and accordingly the tax payment amount will be decided. After the review the tax payment amount may increase or your Partial Payment Installment Agreement may be terminated if your financial condition improves.

Offer in Compromise
This method gives the opportunity to settle the tax debt for an amount which is less than what the taxpayer actually owes. You can get the benefit of this option if doubt exists regarding the accuracy of levied tax and collectability of tax and if it is found that tax collection will lead the taxpayer to an acute financial hardship.

Currently not Collectible
Under this method, IRS voluntarily decides not to collect tax for a year or so. But, once this option is given, all the subsequent tax refunds are withheld and tax collectability is determined at later dates.

Bankruptcy
If a taxpayer files for Bankruptcy, then the tax that he owes can be discharged under Chapter 7 or Chapter 13. But, it is better to avoid this option as Bankruptcy can ruin a person’s credit history.

Jason Holmes a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of debt. Some of his works include e-books like Credit Score The Quintessential Therapy for a Happy Pocket, Take Creditors and Collection Agencies to Small Claims Court and My Story- From Depression To a Smile.

Leave a Comment July 20, 2010

Miss a Payment

Debt Consolidation allows you to take out a loan against your equity to pay for a non-fault. Sounds good at first, until you miss a payment. Now you have lost your home. You use your credit cards to purchase non-stock items, and now your ability to pay these things lost. You have everything you had given to debt free, and now you have nothing but your debt still exists. The debt problem in America is going these days, and has gradually worsened. It seems that nobody has a way to help. It seems that nobody is able to clear your debt. And now, with the new bankruptcy legislation was introduced.

Leave a Comment April 24, 2010

What Is Debt Consolidation?

In most countries, when an organization, company or individual facing a financial or economic crisis of such magnitude that its assets are insufficient to pay the outstanding payment obligations, he can declare bankruptcy. However, the characteristics of a bankruptcy proceedings should make the debtor to wonder if this will produce a relief or whether, on the contrary will fail with disastrous consequences for their heritage, their family, and especially for his integrity mental. Each individual case should be carefully considered in deciding whether it is best to bankruptcy or debt consolidation.

We must remember that year after year, new laws and regulations increasingly restrictive for bankruptcy in order to avoid massive bankruptcy orders, for example, cone only in a country the United States reaches a million to year. For this reason there are new laws in this country since 2005 and some others, and use of this resource even get rid of debts will not be so simple. Moreover, the macha bankruptcy credit history of the person or company that finds, among other disastrous consequences and, therefore, debt consolidation is often seen as a solution to avoid them. Sometimes, as the only solution.

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Leave a Comment March 4, 2010