Does Tax Debt Ever Go Away?
As it turns out, yes – tax debt can go away if the IRS hasn’t attempted to collect on it for 10 years. After a decade has passed since the IRS assessed the debt, the taxpayer is no longer liable for the debt if the IRS made no effort to collect payment.
Although the 1998 IRS Reform and Restructuring Act established this statute of limitations on tax debt collection, you should never count on outrunning the federal government when you’re overwhelmed by tax debt. The IRS is notoriously meticulous when it comes to pursuing tax debt collection, and chances are you’ll face penalties, fines, and liens that keep your tax debt relevant.
There Are More Effective Ways to Deal with Tax Debt
Rather than hoping for the highly likely situation in which the IRS forgets about your tax debt, there are more effective ways to deal with it.
There are three ways people typically resolve their tax debt:
- They pay it off in full
- They engage the IRS in an installment agreement
- They propose an offer in compromise to settle the debt
The latter two of these options can be beneficial if you can’t settle your tax debt outright. An installment agreement is essentially a payment plan. Over time, you may monthly payments to the IRS to settle your tax debt. As long as you stay current on those payments, you can avoid fines, penalties, and interest on your tax debt.
Another way to deal with tax debt is to propose an offer in compromise. Essentially, you propose a lump sum of payment toward your tax debt in exchange for forgiveness of the remaining balance. Although not as easily achieved, this form of tax relief can be an effective way to deal with substantial tax debt.
We Can Help You Resolve Your Tax Debt
Figuring out how to resolve your tax burden on your can be confusing and frustrating. Fortunately, you don’t have to go through this alone. Buchalter & Pelphrey Attorneys At Law can provide the legal guidance and support you require to pursue tax debt relief.
We’ve helped many clients deal with legal matters affecting their finances, including bankruptcy. Rest assured that we have the knowledge and skill necessary to help you seek effective solutions to your tax debt.
For more information and to request a free case review, contact Buchalter & Pelphrey Attorneys At Law online now!