Can Tax Debt Be Eliminated?

Jan 23, 2015 By Evan Nielsen In Taxation No Comment Tags : , ,

Owing taxes is stressful, especially if you are unable to pay what is due. For those that find themselves in the unenviable position of owing Uncle Sam every April 15th, a little known secret is that in some instances your tax liability can be forgiven. Asking for tax forgiveness is not something most taxpayers do, but should. While it may sound too good to be true, there are programs that eliminate or reduce tax debts. Even if you do not qualify for a total elimination of what you owe, there are options that can reduce your obligation and make the debt more manageable.

The IRS has implemented several programs, available to nearly every taxpayer, to help ease the burden of overwhelming tax debt. While payment in full is preferred, the agency is aware not everyone is able to pay what they owe, and in some circumstances making a payment arrangement is a more attractive option than risking nonpayment or engaging in time consuming and costly collection efforts. Programs to eliminate tax obligations vary, but include:

  • Making an agreement to pay cents on the dollar of what is owed, resulting in significant tax savings to the taxpayer.
  • Being placed into uncollectible status. This means the IRS will note that you owe the taxes, but due to being unemployed (or underemployed), are unable to pay

Any time you can pay less than what is owed, you enjoy substantial savings and meet the requirement of paying your taxes. Uncollectible status is not permanent, and your financial situation is subject to review. If your finances improve, you can be asked to begin making payments on what you owe. In that instance, however, you are still able to seek a repayment plan that is less than the full tax debt owed. Legal tax professionals can help you reach solutions that work for your budget, while keeping you in the IRS’ good graces.

If you are experiencing difficulty paying your tax debt, call our office for assistance. Let the professionals at Nielsen Law Group help you negotiate with the IRS. Call (480) 888-7111 or submit a web request here.