from Brad Stroh

IRS Debt Help:

Do you owe the IRS? Are you struggling with IRS debts and cannot figure out what to do? Don’t despair, you are not alone. Many Americans owe back taxes, or cannot afford to pay their IRS debts. If you want to get IRS debt help, it’s important to understand the different IRS tax debt strategies.

There are five strategies for getting out of IRS tax debt.

1.Offer in Compromise: a program where you can settle your tax debts for less than what you owe. Requires making a lump sum or short term payment plan to pay off the IRS at a reduced dollar amount.

2.Installment agreement: a monthly payment plan for paying off the IRS.

3.Partial payment installment agreement: a somewhat new debt management program where you have a long term payment plan to pay off the IRS at a reduced dollar amount.

4.Not currently collectible: a program where the IRS voluntarily agrees not to collect on the tax debt for a year or so.

5.Filing bankruptcy: discharge your tax debts under the strict rules of a Chapter 7 or 13 bankruptcy petition.

Offer in Compromise

Many people who find themselves in debt to the IRS might focus on the first option above - the Offer in Compromise (”OIC”). For those who qualify it can be the optimal solution, however, it is important to note that not everyone qualifies for the Offer in Compromise solution. Only about 15% of applicants succeed in reducing their debts through the OIC program. For this reason and because of the complexity of filing an Offer in Compromise many people enlist the services of a Tax Professional who has a track record of success negotiating with the IRS. This Tax Professional will not only be able to determine if you are eligible to reduce your IRS debts via an OIC but they will also assist you in navigating the complicated IRS bureaucracy to achieve the desired outcome.

An Offer in Compromise is a lengthy and time-consuming process. It takes most individuals anywhere from 12 months to 24 months to achieve a successful resolution on your offer application. Through an Offer in Compromise, taxpayers agree to pay the IRS only the reasonable collection potential instead of the full amount of taxes owed. For some people the “reasonable collection potential” will be less than the full amount of taxes owed - sometimes as little as 10%.

Installment Agreement

Many taxpayers cannot qualify for an Offer in Compromise, Statute of Limitations expiration, or bankruptcy relief but still seek resolution for their IRS liability. In these cases, it may be possible to negotiate long term IRS payment arrangements. The IRS allows “structuring” five primary types of payment plans, or Installment Agreements: Guaranteed Installment Agreements, Streamlined Installment Agreements, In-Business Trust Fund Agreements, Long-Term Installment Agreements, and Installment Agreements on Specified Balance Due Accounts.

Currently Not Collectible

If a taxpayer does not qualify for an offer in compromise and cannot afford to pay an Installment Agreement, Currently not Collectible (CNC) status may be an option. If a client is placed in CNC status, the statute of limitations continues to run and the IRS will not pursue collection actions. However, if a taxpayer’s financial status improves, the IRS can remove the file from CNC status and return to active collection status.

Reasons for attempting CNC status:

1. Taxpayer has income below allowable expenses and there is no indication that the financial situation will improve in the future;

2. Due to high equity, the taxpayer does not qualify for an OIC and has more allowable expenses than income so an Installment Agreement is not an option; and,

3. Taxpayer has more allowable expenses than income and the statute of limitations is getting close to expiring.

Statute of Limitation for IRS Tax Debt

The IRS has 10 years to collect outstanding tax liabilities. This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a number of ways. It could be a balance due on a tax return, an assessment from an audit, or a proposed assessment that has become final. From that day, the IRS has ten years to collect the full amount, plus any penalties and interest. If the IRS doesn’t collect the full amount in the 10-year period, then the remaining balance on the account disappears forever. The statute of limitations on collecting the tax has expired.

Selecting a Tax Professional to handle your IRS Tax Debts

Because of the complexity of the Offer in Compromise and other IRS tax debt processes, many taxpayers hire a tax professional to prepare their IRS documentation and to negotiate directly with the IRS. Tax professionals charge anywhere from $1,500 to $6,000 or more for accurate and thorough IRS representation. Because most of the IRS tax debt solutions involve negotiating with the IRS, your tax professional should be admitted to practice before the IRS. You should be looking for a Tax Attorney, an Enrolled Agent (EA), or a Certified Public Accountant (CPA) to handle your Offer in Compromise. The tax professional must know about the laws governing IRS collection of tax debts, how the IRS evaluates offers, and what all the options are for resolving tax debt problems. “Taxpayers should be looking for a tax professional with years of experience in IRS collection matters, especially experience in dealing with revenue officers, the Automated Collection Systems division, and the complex IRS process” according to Jim Brown, the managing tax attorney with Freedom Tax Relief.

Please be aware that even the most successful tax professionals have lost Offer in Compromise cases, so not every consumer looking for IRS debt help is guaranteed the most savings. It is important to know that your Offer in Compromise will be decided based on your unique financial situation. If you do need IRS debt help, having a tax professional represent you before the IRS will help ensure that all letters and phone calls from the IRS are handled quickly and professionally. But in the end, it is up to the IRS to make a decision about your case.

It is important to know that like death and taxes, your IRS tax debt issue will not simply vanish, so you should seek help before the IRS escalates collection efforts and/or you accrue additional penalties and interest.

from erica19771996

Just trying to get rid of a few high debts in a shorter time.

from Tobi


I know there is credit counseling but that wont help me get the money i need! Right now i don’t have a job yet so that’s a loss! I don’t have that much except like 4 thing plus like 3 medical bills that are small. But still.

from CambridgeCredit

This week Christopher Viale, President and CEO, addresses the notion that credit-counseling services have a negative impact on ones credit.

from Jethro C


how does the book say to reduce debt? whats the 2 magic words he says to use with the credit companies to eliminate debt in 24 hours?

from Jimmy Roos

What is the difference between debt management and debt consolidation? And what are the advantages to using these strategies?

Debt management includes a number of services within a huge group of debt-environment functions and activities, including debt reduction, consolidation, negotiation, settlement, economic failure, credit repair clinics, and even credit reports.

In America, on an average, people have eight credit cards and bear an average debt of $9340. High interest rates of 18-25% is one of the major reasons why debt has grown at a pace of 5% every year. Thus, debt consolidation is a procedure which saves you from the problems of handling large debts of several creditors.

Debt consolidation provides you with support that brings overbearing monthly payments within affordable limits. As alluded to above, there is an enormous need for this service, which is the exact reason why a large amount of debt consolidation companies have opened in recent years.

Are debt consolidation companies safe?

Today, many consumers are afraid to get involved with debt consolidation companies because there have been so many people who have been victimized by bad debt consolidation companies. The trick is to choose your company with utmost care.

We personally suggest that you select a debt consolidation company only after checking its previous records. You should also try to avoid credit repair clinics, as many of them are plainly illegal.

So don’t just follow advertisements blindly. All your potential consolidators and question them. Be your own judge.

How will a good debt consolidation company help me?

A debt consolidation company can help you in a number of different ways, including the following:

* It can help you lower your monthly payments by 40-60%.

* It can help reduce interest rates.

* It can waive late fees.

* It can aid you in avoiding bankruptcy.

* It can make you debt free in the fastest time possible, no matter what your position.

A large number of these companies have websites and in addition give free counseling to consumers. You can take advantage of these services to suit your needs and potentially get out of debt free.

from Brian Williams

The leaves haven’t even turned brown and Christmas ads aren’t yet bloating your morning newspaper. But NOW is the time to plan your New Year’s resolution to get debt free.

Paying off debt is one of the most popular resolutions among Americans. It takes time to assess where you are and where you want to go financially. Last-minute New Year’s resolutions are hard to maintain. Starting months ahead by writing down a budget and assessing your debts helps you study the best options for debt relief.

Losing weight is a popular New Year’s resolution. Think about all the things that fatten your finances like high-interest credit card debt. Eliminating credit cards and the associated debt would mean less weight on your budget.

Assess Your Debts

Find out how much debt you have in comparison to savings. On average, Americans take on too much debt while not saving anything. Assessing your ratio of debt to saving will give you a starting point for your debt help.

Find The Best Plan For Debt Relief

Once you have a handle on your debt situation, investigate the best debt-relief methods. The worse thing is to scramble for credit repair when your money woes reach the crisis point. You may entrust your money to dubious firms that take your cash but do nothing to help eliminate your debts.

Debt relief must be tailored to your unique debt situation. For example, a homeowner can opt for a home equity line of credit (HELOC) to consolidate various debts. A debt consolidation loan without collateral can be used to combine debt, especially credit card debt, at a lower interest rate. Debt settlement firms can negotiate a reduced debt balance as you pay less on your combined debts or a credit counseling agency can help straighten out a credit mess. You need time to research your various options.

Set A Strict Budget

Like a corporation assessing its finances after a 12-month fiscal year, your resolution to live debt free can put you on a strict financial regimen. A written budget is key to succeeding at being debt free. This may mean eliminating costly activities such as getting rid of cable, traveling less, eating out less and attending fewer movies.

Figure out how much money you can devote each month to paying off debt. You can stop and examine any big-ticket expenses upcoming in 2008 such as major vehicle maintenance or family vacations. You can build savings into your budget to fund large expenses instead of using a credit card.

Monitor Your Debt Management

Track your debt-relief efforts. A good idea is to create a scoreboard counting the dollars off your debt. Get a bunch of posters and markers to make it a fun family activity. The scoreboard should be in a prominent place in your home, such as the refrigerator door or bathroom door. The scoreboard is a constant reminder of the importance of a debt-free life. Update it as often as you see fit, perhaps monthly or weekly.

Of course, you don’t have to create a scoreboard to document your progress in paying debts. But you do need some constant reminder of how you are doing. If not, you may become distracted by other matters and forget about let your debt-relief goal.

Start Today

Preparation is important in getting out of debt. Don’t wait until Dec. 31. Any New Year’s resolution without a plan will not work.

from Coma White (jsts22)

We are something like 6 trillion dollars in debt. How are we going to pay this back? An increase in taxes is really the only thing that could even dent that debt. And when we have to raise the taxes because we are so far in debt, the cons will blame the democrats, even though it was the conservative agenda that caused taxes to raise in the first place. And this debt has interest tacked onto it too, so the longer it takes to pay it off, the more it will increase. If you know basic economics, you know that you can’t spend more than you have (cutting taxes during a time of war).

from MyHappySock

The FTC enforces the Fair Credit Reporting Act (FCRA), which requires Equifax, Experian, and TransUnion to provide you with a free copy of your credit report, at your request, once a year.

Don’t believe that you have to pay someone for this information. Read about it from the FTC’s website: http://www.ftc.gov/bcp/conline/pubs/credit/freereports.shtm

Get your credit reports, free of charge, once every 12 months, here: http://www.annualcreditreport.com

Pass this information on to your friends. It’s good to learn about your credit history and be familiar with what is reported to these agencies.

from mony ou

I have 4 credit cards with approx. $25,000.00 worth of debt on them. I would like to get ahold of a non-profit debt counseling service in order to get rid of the high interest rates and pay them off alot sooner instead of only paying the interest and the over the limit fees. I have not used these cards for the past 5-6 years and the accounts are closed except for me making payments on them. I am not even touching the actual principal that I owe, although, I have probably paid enough on these cards to have actually paid off the actual principal. How is the best way to do this and what are some reputalbe non-profit agencies that will help achieve this? I have also heard that some credit cards will take a settlement on some accounts. Is this a good idea and how much of the amount owed do they usually want? I realize that this may hurt my credit rating but to be honest with you it isn’t worth squat now, so what is the difference? Does the debt consolidation hurt your credit as well?