| One day at a time...You have a debt to the IRS and | | | | can pay off the debt with a bank loan, then you'll |
| you've been in a monthly payment plan for a couple of | | | | actually get back your tax refunds each year. |
| years. You're paying what you're able, and your tax | | | | 2. But what if you can't get a loan? You can get the |
| refunds from the last couple of years have been | | | | assistance of a tax attorney or CPA to negotiate with |
| applied to your debt. However your IRS debt doesn't | | | | the IRS on your behalf. Tax attorneys and CPAs have |
| seem to be going down and you are understandably | | | | the ability to work directly with the IRS, and they can |
| frustrated. | | | | work to make sure your payments are going to the |
| Adding on and on...The problem is that the IRS is | | | | actual debt principle, and not to the interest and |
| constantly adding on interest and penalties to your | | | | penalties. Since the principle will actually be lowered, |
| debt. Your debt is accruing about 2% per month in | | | | then the interest and penalties will be less. |
| combined interest and penalties for a total of 24-25% | | | | 3. However hiring a tax professional may not be an |
| added on to your debt each year. For example if you | | | | option either. Worst case scenario is that you may |
| owe $10,000, after one year your debt increases to | | | | have to wait for the Statute of Limitations to run out |
| $12,400. And the best part is that the IRS applies any | | | | on your debt. What's the Statute of Limitations? The |
| payments or tax return refunds to the interest and | | | | IRS has a limited time of 10 years to collect on a debt. |
| penalties first! That can cause the principle of the debt | | | | After those 10 years the debt is released, and you |
| to go down slowly. | | | | don't owe any further money. However the Statute |
| In the above example you would have to pay $200 | | | | can be extended under several factors that you can |
| per month just to cover the interest and penalties. | | | | read about in my article, "IRS Tax Debt and the |
| What can you do? Here are three possible solutions. | | | | Statute of Limitations: 10 is the Magic Number." |
| | | | Take a load off...These are the best solutions to not |
| 1. If you're able to get a bank loan that can be a great | | | | only get your actual debt reduced, but they can give |
| help. Even if your credit is in trouble a bank loan's | | | | you a feeling of hope that you can get out of your IRS |
| interest would be far lower than the IRS, and you | | | | debt trouble. |
| would see an actual decrease in the debt. Also if you | | | | Now you have the smoking gun...Use it! |