> What To Do If You Owe The IRS A Lot Of Money ?

• If you owe the IRS a lot of money, it is important to take action quickly. Before taking any specific steps, determine what type of debt you have with the IRS. The most common types are back taxes, tax penalties, and estimated taxes. After you know what type of debt you owe, there are several strategies that can help resolve your issue.

• One potential option is to set up an installment agreement with the IRS if you cannot pay your debt in full by the due date. This will allow you to make monthly payments until the amount owed is paid off. You may also be eligible for an Offer in Compromise (OIC), which allows taxpayers who can’t afford to pay their tax bills in full to settle for less. Additionally, certain taxpayers may be eligible to have their debt partially or completely relieved through an IRS program like the Fresh Start Initiative .

• It is important to research your options and understand which ones are best suited to your situation. If you need help understanding what type of debt you have or determining the best course of action, consider reaching out to a qualified tax professional who can provide guidance on how to resolve your issue with the IRS. They can also assist in preparing any required forms and documents.

Finally, it is important to stay current with your taxes going forward. Make sure that you file all returns by the due date each year and pay any taxes due on time. This will help you avoid additional penalties and interest that can compound your existing tax debt.

What To Do If You Owe The IRS A Lot Of Money

> What Is The Fresh Start Initiative ?

• The Fresh Start Initiative is an IRS program designed to help taxpayers with past-due tax obligations. The program offers several types of relief for taxpayers who are unable to pay their taxes in full, including installment agreements; Offer in Compromise (OIC), and a streamlined process to request Currently Not Collectible status.

• The Fresh Start Initiative also increases the amount of money that may be owed before the IRS files a federal tax lien and makes it easier for taxpayers to obtain a lien withdrawal after taking steps to pay off the debt.

• Additionally, the program reduces penalties for eligible taxpayers who have failed to file previous tax returns or make estimated payments.

> How Does The Fresh Start Initiative Work ?

The Fresh Start Initiative offers several types of relief for taxpayers who are unable to pay their taxes in full. Through the Fresh Start Initiative, taxpayers are able to participate in four primary programs:

• Installment Agreement:

Taxpayers who cannot pay their taxes in full may be eligible to set up an installment agreement with the IRS. This allows taxpayers to make monthly payments until the amount owed is paid off.

• Offer In Compromise (OIC):

The OIC program allows taxpayers who cannot afford to pay their tax bills in full to settle for less. This process involves submitting an application and providing financial information to the IRS.

The IRS typically denies offers in compromise (OIC) when they think they can collect the full amount of money from the taxpayer through a lump sum payment or an installment plan. Their total earnings are estimated through their income and assets. However, there are instances where OICs have to be accepted due to certain legalities.

Use the IRS's Offer in Compromise Pre-Qualifier tool to see if you qualify.

The IRS offers two methods for taxpayers to pay their current tax debts through an Offer in Compromise:

Lump Sum :

This amount must include 20% of your offer total and you will have five months to pay it.

Periodic Payment :

The IRS necessitates that you pay your taxes for two years. The first payment, as well as the application fee, are due when you submit your documents.

• Currently Not Collectible Status:

Taxpayers may be able to qualify for Currently Not Collectible status if they can demonstrate that their income is too low or their expenses are too high to allow them to pay anything towards their tax debt. If approved, this will suspend collection action until the taxpayer’s financial situation improves.

• Penalty Abatement:

The Fresh Start Initiative also allows taxpayers to request penalty abatement or a reduction in their penalties for failing to file previous tax returns or make estimated payments.

By taking advantage of the programs offered by the Fresh Start Initiative, taxpayers can resolve their tax debt with the IRS.

> Get Professional Help

• Tax debt can be difficult to manage on your own and it is important to seek help from a qualified tax professional. Tax professionals are knowledgeable about the Fresh Start Initiative and can provide you with the guidance you need to understand your options.

They can also assist you in submitting documents to the IRS, negotiating payment plans, and determining if you qualify for Penalty Abatement or Currently Not Collectible status. A tax professional will work with you every step of the way to ensure that your taxes are paid in full, on time, and without additional penalties or interest charges.

Faris Khatib, CEO of Ideal Tax says although it may seem impossible, with the help of professionals, you can pay off your tax debt - even if you owe a large sum to the IRS. The Fresh Start Initiative provides multiple programs to assist you in managing your tax debt so that you attain financial freedom.

> The Bottom Line:

• If you owe a large amount of money to the IRS, you may feel overwhelmed and unsure of what to do. Fortunately, there is help available. The Fresh Start Initiative provides numerous options for taxpayers who cannot afford to pay their taxes in full. Through Installment Agreements, Offers In Compromise, Currently Not Collectible Status, and Penalty Abatement, taxpayers may be able to successfully resolve their tax debt without incurring additional penalties or interest charges.

• It is important to seek help from a qualified tax professional who can provide guidance and assistance throughout the process. With the right support, you can get your taxes paid off and move forward with financial freedom. Let Ideal Tax Solutions take the stress out of tax season. We offer free consultations to help get you on track.