Are you someone who is considering the prospect of filing for bankruptcy due to tax debt? If so, have you thought about some of the repercussions that could result from this? While filing for bankruptcy may initially grant you a fresh start, it also comes with its share of disadvantages. Perhaps the greatest ramification of declaring bankruptcy is the fact that it stays on your credit report for ten years or more, which can make it rather difficult for you to obtain credit. Fortunately, there are ways that you can reduce tax debt and avoid filing for bankruptcy. Specifically, you can achieve tax debt relief through various tax debt settlement options.
Tax Debt Relief and Resolutions
When it comes to IRS tax help, your best bet is to consult with experts in the field. Tax debt relief can most commonly be brought on through the help of professionals such as CPA’s, tax attorneys and tax accountants. They can offer you valuable advice on your tax debt settlement options and show you how to best proceed depending on your individual situation. Because you may not be so well-versed with IRS practices and tax laws in general, you can benefit greatly from their expertise in dealing with the IRS on tax debt issues.
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The IRS provides various remedies in dealing with tax debt depending upon your circumstances; one of them is called the
Innocent Spouse Tax Debt Relief. This particular debt resolution is available if you are seeking tax debt relief from taxes and penalties that stemmed from a joint
tax return, which may have been filed by you and your spouse or in some cases, ex-spouse.
How do you qualify? Well, if you can prove to the IRS that you had no prior knowledge of any mistakes or errors made by your spouse or former spouse in the form of any false reporting on your joint tax return, you may be eligible for Innocent Spouse Relief. Basically, the IRS offers you a way to avoid any tax liability that resulted in errors on a joint tax return not filed by you.
Other Ways to Settle Tax Debt
You can also get tax help through other options including:
Income Debt Settlement, often referred to as an “
Offer in Compromise” is a tax debt settlement program offered by the IRS to individuals who are incapable of paying their overdue income taxes. The necessary forms for application purposes can be directly obtained from the IRS; however there are certain qualification criteria you must satisfy in order to be eligible for this program. Specialized
tax services, including those of tax lawyers will be able to help you in determining whether you qualify or fill you in on what you need to do in order to meet the requirements for qualification. Prior to considering bankruptcy as a solution to your tax debt, you should look into the Income Debt Settlement option, as being in debt is something that will in fact help you to qualify for the program.
Another tax debt relief remedy you may want to think about is a
consolidation loan. Most debt consolidation loans are based on equity and the interest on a home equity loan is usually tax deductible. This means that all of the interest on the consolidation loan you take in order to pay off your tax debt can be subtracted from the payments you will make on the subsequent tax pay period. Most of the time, this option allows you to exchange your costly tax debt for a cheaper consolidation loan.
Finally, you can also always contact the IRS to see if you qualify for a payment plan. In some cases, they can offer you payment options to fit your individual financial capabilities. People often tend to get somewhat intimated by the IRS, however you’ll never know what kind of tax debt settlement option they may be able to offer you unless you take some action and contact their representatives. You don’t have to resort to bankruptcy to get tax debt relief; remember that you can avoid filing for bankruptcy through tax debt settlement.
Additional
Tax Debt Information: