Deciding on the right IRS Payment Option can be hard since are all so different. The typical options when seeking an IRS Payment Option with the IRS are the Installment Agreement and Offer in Compromise.

Installment Agreements let an individual who is in debt to the IRS to pay back a debt in a set amount of monthly payments. The most commonly used IRS tax debt payment tactic are these Installment Agreements. This is just fine by the IRS, when you keep in mind how much excess money this can make them at your expense. Let us tell you the shocking truth about IRS Installment Payment Plans.

Wasting hard-earned money with payments to the IRS every 30 days with an Installment Agreement can start to feel like you’re going nowhere because, the massive interest and penalty fees on your IRS Debt continue to accumulate every month!

Are there any alternatives left for me? If you have no other option, the Installment Agreement lets you satisfy what you owe over a period of time using monthly payments. However, you must see it is costing your bank account plenty in penalty fees and interest. So what other choices do you have?

Paying in Full: Most people absolutely are unable to pay their entire debt with one lump sum, but if you are fortunate enough to be able to borrow from family, friends, or the bank to get this dilemma behind you… why wait? You could save a lot in interest and penalties by paying what you owe all at once!

Credit Card: If the interest rate on your credit card is much cheaper than the IRS payments, and your credit card limit is high enough, use your credit card to pay the tax debt. It may be easier to deal with MasterCard, American Express, Discover, Visa, etc. than with the IRS. Unlike the IRS, your credit card companies are less likely to levy your property or issue a tax lien. But remember, if you use your credit card to pay your debt, the IRS will consider the amount of money you “saved” as “income.” A potentially unethical scheme, but they get away with it!

Offer in Compromise (OIC): Very few tax debtors will be eligible for an Offer in Compromise (OIC). When you meet any of the following three qualifications, you could be eligible for an Offer in Compromise.

Unable to Pay: If you are unable to repay your tax debt in full before the 10 year statute of limitations is over, you may be eligible for an Offer in Compromise. The IRS will evaluate your ability to pay off your debt, even considering factors like heath and age.
Skepticism as to Liability: If you’re not accountable for the IRS debt, you are eligible. You must be able to show that you’re not liable for the debt estimated.
Hardship: You might be eligible for an Offer in Compromise if an unpreventable hardship is inhibiting you from earning money (ex: handicapped, natural disaster, etc.).

Save yourself money by lessening the amount you owe with an Offer in Compromise (OIC) settlement. In addition, this resolves the IRS debt all at once.

Currently Not Collectible(CNC): The IRS might agree to a permanent or temporary reprieve from its collection proceedings, depending on the severity of your hardship situation. If you are unable to pay, you can’t pay.

Professional Consultation: Now you know that when you need to pay back your tax debt, an Installment Agreement isn’t your only option. If it’s not working, think about speaking with a tax expert to discover if any of the above alternatives fit your situation.

Author Bio: For expert tax advice visit IRS-Tax-Settlement-HQ.com TODAY! and see how we can help you.

Category: Finances
Keywords: Installment Agreement, Offer in Compromise, IRS Payment Option, IRS back taxes