You might never have seen it coming, but financial stressors can happen to anyone, and the IRS will come knocking if you don’t take care of your tax situation.
Whether you’re staring at a long list of credit lenders or you need to file for bankruptcy, you should know that your challenges can be overcome with a variety of forgiveness options made available by the IRS and the legal system. Take a look at this quick guide to learn more about how you can work out your financial struggles with the IRS.
Know Which IRS Forgiveness Options Available to You
When it comes to collecting taxes, the IRS is not in the business of forgiving debt so easily, but they must follow legal restrictions and are willing to work with individuals with financial hardships in order to retrieve what they can within their limited time window. You’ll need to know what options are available to you before proceeding to fill out the proper forms.
Just like other forms of debt, if you find yourself in a situation where you are deemed to be insolvent, bankruptcy can eliminate what you owe with the IRS, though you’ll need to learn the difference between what is allowable from various types of bankruptcies. If bankruptcy is not on the table, you can still solve your financial crisis by applying for total or partial debt cancellation through the IRS with its Offer in Compromise application.
What It Takes to Qualify for IRS Debt Forgiveness
Because your financial situation is unique to you and your circumstances, the IRS will take into consideration your personal ability to pay, income, expenses, and asset equity to come to a conclusion on your eligibility for an Offer in Compromise.
When you submit an offer, you’ll be filling out Form 433-A (OIC) for an individual or 433-B (OIC) for a business, Form 656, and submitting fees and an initial payment in conjunction with either a lump sum of cash or periodic payment option as described in the Offer in Compromise Booklet, Form 656-B.
How to Get Help With Your Debt Forgiveness Application
If you have the time and resources to fill out all the forms correctly yourself, it’s certainly an option, but for many people, it can be a great help to have a professional save the day by doing the heavy lifting.
No matter which type of debt forgiveness works best for you, seek a certified public account or other tax professional in your area to ensure your paperwork is all in order. Avoid scams from unprofessional services that will seek upfront payments that guarantee results only to delay your efforts and leave you in worse condition than you started. Check online reviews to see which businesses will serve you rather than steal your time and money.
While no one wants to have to be in a position where debt forgiveness is a necessity, you now know that you have options if you find yourself in need of assistance, just make sure you take the recommended steps toward completing the process properly.
Cover photo credit: amtec_photos / Flickr
