If you owe money to the IRS, you may feel overwhelmed by how to handle the situation. And you may have heard misinformation about different IRS debt relief programs, which can make things more confusing.
Here are some of the most common myths about IRS debt relief programs and what’s actually true:
- Myth: Debt relief is only available to those in extreme financial hardship—Although some programs are designed for taxpayers facing significant financial challenges, there are several relief options available. For example, you may qualify for an installment agreement, penalty abatement, or another type of resolution program.
- Myth: The IRS forgives tax debt after a certain time period—Although collection statutes do exist, you should not try and rely on them. Interest and penalties will continue to accumulate on your tax debt, and the IRS may decide to take collection actions long before the statute expires.
- Myth: Filing returns triggers IRS enforcement—Becoming compliant by filing your required returns is often the first step toward resolving tax debt. The IRS generally wants taxpayers to address their obligations and work towards an IRS debt relief solution.
- All taxpayers qualify for an Offer in Compromise—These agreements allow some individuals to settle their tax debt for less than the full amount they owe. Although this program can be effective, the qualification requirements are strict, and not everyone is eligible.
If you want more information about IRS debt relief programs and how to take care of your tax debt, contact me, Denson Pepper CPA, today.