How Does IRS Debt Settlement Work in Pennsylvania?
To settle your IRS debt in Pennsylvania, you have a couple options that you can attempt. You can negotiate with the IRS or make a payment plan with the IRS.
How to Negotiate with the IRS?
Are you looking to settle your tax debts with the IRS? The best way is to negotiate with the IRS directly or have a tax attorney to speak to the IRS on your behalf.
If you do not know the tricks of tax debt negotiation, then you can follow the steps below and negotiate with the IRS to settle your back taxes:
- Know the law: Learn about the tax debt settlement laws in Pennsylvania. Or hire a professional tax attorney that knows all the laws, tax laws change yearly, and we at Sheppard Law Offices keep up to date with all IRS tax laws in Pennsylvania.
- Notify the IRS: Inform the IRS that you are willing to settle your back taxes.
- State your reason for back tax settlement: Take the time and state the reason why you need a tax settlement. This will increase your chances of getting the debt settlement proposal accepted.
- Offer a large settlement: Try and save quite a bit before you initiate negotiations with your creditors.
- Propose a payment plan: If you can’t afford to make a large lump sum as a, then you can work on a payment plan with the IRS, which will allow you to make affordable monthly payments.
- Make sure your back taxes are noted as “settled”: After the back-tax settlement or payment plan is complete and paid off, make sure the IRS reports your accounts as “paid” or “settled” so you can work on increasing your credit score.
How can a Pennsylvania Tax Attorney Help You?
If you think you cannot negotiate with the IRS, then you can hire a tax attorney that can help with a debt settlement with the IRS in Pennsylvania. Before hiring a tax attorney, you should check out it the tax attorneys company is accredited by the Better Business Bureau.
When you hire a tax attorney to work on a tax settlement, they will work on your tax debt issues in the following way to reach a settlement with the IRS:
- First, the tax attorney will consider your financial and work on which program will work best in your favor.
- When you hire a tax attorney, they will work with the IRS and creditors to make sure they stop calling you about your back taxes.
- Your tax attorney will work on a payment plan with the IRS and make sure that that payment program is set up to make payments each month to pay off your back taxes.
- If you decide to negotiate with the IRS, your tax attorney will make sure that you have saved enough to make a reasonable settlement with the IRS.
- If your unable to pay the full amount in one payment your tax attorney will talk to the IRS on your behalf to work on a reasonable payment plan arrangement.
What Are the Benefits of a Pennsylvania Debt Settlement?
A Pennsylvania debt settlement program with the IRS, can give you the following benefits:
- It will help you avoid bankruptcy.
- Stops calls from creditors and debt collectors.
- Your credit score improves.
- You have time to save and pay your back taxes in full.
Is my Tax Settlement What was paid Taxable?
Debt settlement is taxable with the IRS. The IRS considers any forgiven dollar amount to be taxable income.
During the end of the settlement with the IRS, your creditor is to report your forgiven amount to the IRS and send you a 1099C form to report the amount on your Federal tax return.
If your creditor doesn’t send you the 1099C form, notify the IRS about the amount that was forgiven through your debt settlement and report the amount on your tax return.
8 Ways to Settle Your IRS Tax Debt
- Installment Agreement. Apply, or work with the IRS to get accepted for a monthly payment plan.
- Partial payment installment agreement. A debt management program where you can apply for a long-term payment plan to pay off your back taxes with the IRS in smaller installments due to your financial situation. A qualified tax debt attorney can negotiate and get the lowest possible monthly payments.
- Offer in Compromise. This is a program where you can settle your back taxes for less than what you owe, including the interest and any penalties. This will require either making a one-time payment or set up a short-term payment plan to pay off the IRS, at a reduced amount that is owed. If you owe the IRS more than you can afford to pay, this could be the plan for you.
- Not currently collectible. With this IRS program the IRS will agree to give you a year before they try to collect the back taxes that you owe. Not Collectible means that a taxpayer doesn’t have the financial ability to pay their taxes. If you are accepted for this program, you can apply for a collection appeal to stop an IRS levy, lien, or seizure.
- Release Wage Garnishments. When you owe the IRS money, they can levy your wages, salary, and many other items, until the levy is lifted. If you don’t have enough money financially, you can apply for a release of wage garnishment to survive with a levy.
- Stop the IRS from Levying Your Bank Account. The IRS can add a bank levy to collect money from your savings and/or checking accounts to pay off your back taxes. When the IRS levies a bank account, your bank can release any amount is available in your account, up to that day only, they are unable to take money that was put into the account after the date that they levy your bank account.
- Innocent Spouse Relief. If you happen to be affected by your spouse’s IRS tax problems, you can prove to the IRS that you are not subject to the taxes caused by your spouse or ex-spouse.
- Pay Attention to the Expiration of the Statue of Limitations. The IRS has a maximum of 10 years from the date of your filing, to collect your back taxes, penalties and interest. An experienced tax attorney can resolve your IRS problems by strategizing with you to wait out the 10-year expiration date.
Contact the Pennsylvania Tax Attorneys at Sheppard Law Offices Today
If your struggling with IRS issues and don’t know where to turn, contact the professional tax attorneys at Sheppard Law Offices whom can help strategize what is the best way to settle your back taxes. We specialize in Pennsylvania tax laws and can get you a fresh start. Call Sheppard Law Offices today at (877) 505-9455 , to talk to one of our tax attorneys for a free consultation.