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There are many ways to settle IRS back taxes. The only thing you do not want to do is ignore this situation. When you owe money to the IRS, no matter how much it may be, you need to pay up as soon as possible. This does not mean that you have to do so all at once, though. As soon as you know your options for settling IRS back taxes it becomes easier to see what will work best for you.

Here are a few of the most common ways to settle IRS back taxes:

1. Use a tax professional. Why do everything on your own when you do not have to put yourself through the stress? A professional who knows how to work with the IRS and settle your taxes can save you a lot of money. The job of a tax professional is to analyze your situation, inform you as to what is going on, and help you make the right decisions.

2. Installment agreement. This is one of the best ways to settle IRS back taxes. With an installment agreement you are allowed to pay back a small amount of your debt each month, instead of in a single lump sum. As long as you pay the minimum on time every month the IRS will consider your account to be in good standing.

3. Partial payment installment agreement. With a partial payment installment agreement you will not be required to make the full monthly payment that is required with an installment agreement. This part pay alternative is available to those that cannot afford to pay the full amount and in order to do so they must prove to the IRS that they don’t have the means to make the monthly payment required with the regular form of installment agreement.

4. Declare Hardship. One thing people don’t realize is that the IRS actually does have some limits as to when they will collect from individuals. The IRS does not want to collect from taxpayers if the collection would cause extreme financial hardship. However, the IRS will collect if they are not made aware that the collection of taxes would cause financial hardship. If you can prove to the IRS that the collection of taxes would cause financial hardship they will put a temporary hold on collections and allow you time to better your financial situation before they collect. Sometimes if your financial situation does not improve enough, they may never collect from you. The statute of limitations on tax debts is 10 years and many times this time period expires while the person is under hardship and they are no longer liable for the taxes owed.

5. Bankruptcy. Typically bankruptcy is not the best settlement method to ever choose because you owe taxes but sometimes it can help you settle if you owe other debts as well. With Chapter 7 you can discharge all taxes owed if you meet strict requirements. You will first be required to liquidate your assets in order to put that money towards paying your taxes first and after that it is a possibility that any remaining can be discharged. Other types of bankruptcy will require you to still pay back your taxes in a form of a payment plan.

6. Offer in compromise. This is the method that most people who owe IRS back taxes want to consider. With an offer in compromise you end up paying less to the IRS than what you actually owe. Those who want to settle their debt for pennies on the dollar need to look into this option. The only downfall is that the IRS does not accept offers from everybody. Instead, offers in compromise are only accepted roughly 10 to 15 percent of the time. A tax professional can help you decide if you qualify.

These three methods for settling IRS back taxes are commonly used by taxpayers across the country. If you consider them all you should find your way out of tax debt soon enough.

Need to settle taxes? Find out more information on various ways to settle back taxes with the IRS. Also connect with excellent tax professionals to help you resolve your tax problems.Article Source:http://www.articlesbase.com/finance-articles/how-to-settle-irs-back-taxes-6-different-ways-1770689.html

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