Can Back Tax Debt Be Consolidated?
- June 1, 2019
- Posted by: asal
- Category: Tax Relief
You should not carry shame if you get behind on your back taxes with the IRS. Just like life happens, emergencies happen. Unexpected medical expenses and family situations can arise. Then, all of a sudden, you find yourself in over your head with back tax debt. There are tax relief options for you when struggling to settle back taxes. Have you ever wondered if you can consolidate your back taxes like you can credit card debt? The answer is, there are options to consolidate your tax debt. However, back tax debt consolidation doesn’t work the same way as credit card debt consolidation. When you don’t pay back taxes, the IRS can seize your assets, garnish wages, and put liens on your property. If you have multiple bills from back taxes, you are not alone. There are options to consolidate back taxes, and Platinum Tax Defenders can help.
What do you do first to settle back taxes?
The first thing to do when attempting to settle back taxes is to consult a tax resolution specialist. There are multiple tax relief programs to pay back taxes. The IRS wants to get their money back in whatever way they can. So, the IRS is often willing to settle back taxes for less than you owe.
How can I consolidate my back taxes? Apply for an Offer in Compromise
One way to combine your back taxes is via an Offer in Compromise. An OIC is an agreement between the taxpayer and the IRS that settles back taxes for less than you owe. The IRS is likely to approve an OIC if they can prove you won’t be able to pay back taxes. It’s likely that your OIC request will receive approval if:
– Paying back taxes would cause you economic hardship
– There is a doubt as to the actual amount you owe
– You aren’t able to pay the full amount within a reasonable timeframe
Before attempting to apply for an Offer in Compromise, consult a tax attorney. The tax relief experts at Platinum Tax Defenders have saved their clients hundreds of thousands of dollars. Recently, the Platinum team got their client’s back tax bill down from over $140,000 to only $100.
How do I qualify for an Offer in Compromise?
Before applying for an Offer in Compromise, the best thing to do is consult a seasoned tax attorney. Applying for an Offer in Compromise requires a lot of time, paperwork, and correspondence with the IRS. A tax relief professional can tell you whether you will qualify before you go through the application process.
Qualifications for applying for an Offer in Compromise
Here are the factors the IRS will consider when they receive your Offer in Compromise application.
– The IRS doubts it will collect your total back tax sum in the foreseeable future. This requirement is what the IRS calls “doubt as to collectibility.” The IRS will typically place this qualification on a business or individual who has lost all revenue. An individual with these qualifications will likely not ever make enough money to pay back taxes.
– Paying your tax bill would cause an economic hardship or would be “inequitable” or “unfair.” The IRS will not force you to pay back taxes if it causes you to be homeless.
– If there is a mistake that the IRS makes on your tax returns, that may qualify you for an OIC. Depending on the error, the IRS will reduce your back tax amount or eliminate it.
Understanding back Tax Debt
Before you attempt to apply for a tax relief program, it’s good to understand your back tax debt. A tax attorney can help you understand your debt and what options are available to you. Each tax debt you accumulate with the IRS has a specific year attached to it. The back tax debt from each year generates its penalties and interest. The good news is, the IRS will allow you to consolidate back taxes for multiple years.
Consolidating Back Tax Debt with Installment Agreements
If you and your tax relief professional don’t think the IRS will agree to an OIC, you can apply for an Installment Agreement. In an Installment Agreement, the IRS agrees to have you pay monthly back tax payments in an amount that you can afford. Your tax relief expert will be able to negotiate a monthly amount you can afford with the IRS. An Installment Agreement also allows you to consolidate all of your back tax debts into one monthly payment. Depending on how substantial your back tax debt is, these payments can stretch out as long as six years. While penalties and interest will continue to accrue, you won’t have to pay several different debts each month. An installment agreement allows you to pay back taxes in the convenience of one monthly bill.
What if I accrue more tax debt when paying back taxes?
Make sure you are on the lookout for new tax liabilities after you consolidate your back taxes. Even though you’re in an Installment Agreement, it doesn’t put future tax obligations on hold. You will still be required to file new taxes for each year after you consolidate your back tax debt. If you are in an Installment Agreement, and you don’t pay the following year’s taxes, your current Installment Agreement will become invalid. Hire a tax relief professional or CPA to ensure you aren’t making any mistakes in your back tax debt consolidation.
Need Help Consolidating Back Tax Debt? Call The Tax Relief Professionals at Platinum Tax Defenders
Hiring a tax relief specialist can get you a better deal when attempting to consolidate back taxes. A tax attorney can help you determine which repayment method is right for you. The tax resolution specialist can also negotiate with the IRS on your behalf and submit the necessary paperwork. Owing back tax debt can leave you in bad financial shape. The IRS only wants to get what money you owe them in back taxes. Often, they are willing to help you settle back taxes, but you have to know how to try. That’s where a tax relief services company can come in handy. When you hire a tax resolution professional, there are other methods you can use to avoid expensive back tax debt. Call Platinum Tax Defenders for a free consultation today.