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Problems Taxpayers Face in Resolving Tax Debt

September 3, 2013

A successful resolution of tax debt involves many steps, including the preparation of the tax case, choosing a suitable payment method, presenting the case before the IRS, and negotiating its terms and conditions. The proper and timely implementation of all these steps is important to achieve an early and beneficial resolution.

Minor difficulties in tax debt resolution, such as delays in starting the process, or applying for the wrong payment plan can be corrected easier than serious difficulties, such as aggressive IRS collection actions, or defaulting on an established payment plan. To avoid these problems, taxpayers should carefully research tax professionals before hiring them, acquire basic knowledge of tax debt payment plans, and stay up-to-date on the progress of their case.

The goal of the IRS is to resolve a tax debt, even if taxpayers are not able to pay the entire amount of tax debt. IRS payment plans, such as Currently Not Collectible are designed to assist taxpayers that are unable to pay any amount of tax debt due to financial difficulties.

Taxpayers who are able to pay their tax debt, but not in one lump sum, should consider an IRS Installment Agreement. This IRS debt payment plan allows payment of the tax debt in monthly installments. With the various Installment Agreements available, taxpayers should find the assistance of legal help from tax lawyers before applying for a payment plan.

It is important to remember that the IRS penalizes taxpayers for applying for a payment plan they are not eligible for. Tax debt reduction plans may sound tempting, but they have strict eligibility criteria that taxpayers must satisfy.

Tax debt resolution can only be achieved by choosing a debt payment plan if a taxpayer is not financially capable of paying the entire tax debt in a single payment. To avoid problems in resolution, it is essential to resolve tax debt carefully, timely and successfully.

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