A brief knowledge about IRS Installment Plan

Posted by Alliance Tax Advocate on November 12th, 2019

A brief knowledge about IRS Installment Plan

It is good to go through a proper IRS Installment Plan and solve all your dues. The reason lies in facing potential penalties from the Internal Revenue Services. If you are having due for businesses with outstanding tax balances, you are liable to face the eventual seizure of personal or business assets in some cases. 

Tax settlement firms and their promise 

There is a new type of business growth to help troubled taxpayers cope with their tax debts. They are capable of handling the tax dilemma, which can initiate a significant financial crisis. The tax solvers are commonly known as tax settlement firms. These special entities claim that they can drastically reduce or eliminate whatever the customer owes the Internal Revenue Services. These firms promise to deliver complete satisfaction to their client. 

Meaning of a Tax Lien 

A lien that secures the government's interest in your property when you do not pay your tax debt in time is known as an IRS Tax Lien. A levy captures the property to pay the tax debt. The Internal Revenue Services is capable of levying, seizing and selling any type of real or personal property that an individual owns or has an interest in if that individual does not pay or arrange to settle the tax debt. 

Ways to remove a tax lien 

The most straightforward and easy way to eliminate a federal tax lien is to pay the tax debt in full. This results in a release of the lien within thirty days of the payment. However, if there is a substantial amount involved, paying off the debt right away may not be financially possible. 

The time required for tax lien removal 

 There is a starting point to any tax lien. Generally, it lasts for the period that the IRS has to collect from you. It can be even for 10 years. After the expiration of a 10-year statute of limitations on collections, the IRS starts releasing the lien. This authority can subordinate the tax lien if you agree to pay an amount equal to the interest that they are subordinating.

Key features of tax firms 

The Tax settlement firms constitute numerous skilled experts, former IRS employees who understand how to bat for their clients. There are certain promises done by tax settlement agencies. Those promises are virtually impossible to fulfill as the Internal Revenue Services rarely accepts any proposal to decrease the amount of tax owed. To qualify for offers-in-compromise is also difficult. This process typically takes at least several months to complete. High fees are generally charged by tax settlement companies.

What the tax firms offer 

There are several very extenuating circumstances where repayment of back taxes occurs. These circumstances are perhaps like an extension of time to pay off the tax debts. The situation can arise if the taxpayer is near death or if the debtor is unable to obtain any type of gainful employment. It can also take place if the person owing taxes has absolutely no assets.