There can be any number of reasons why a debt to the IRS does not get paid. Regardless of the reason for the delinquency, at some point the issue needs to be resolved. Sometimes the amount can be overwhelming, or the accumulation of many years of missed payments. In these cases, you may want to consider ways to reduce your IRS debt.
While the government does not often negotiate, there are times when the IRS will. There are a few different routes you can take:
- Call the IRS yourself.
You can attempt to take matters into your own hands and reduce your IRS debt by simply asking them. Surprisingly, and depending upon the circumstances, this may actually work. The department is more interested in getting at least some money from you than they are in driving you into bankruptcy.
- Hire a mediation company.
There are advertisements everywhere for these companies. They specialize in negotiation tactics designed to reduce IRS debt. The drawback is that there will be a fee, usually a percentage of the amount saved - however, this may still be worth it if the amount you owe is large enough.
- Enter into debt consolidation
In this scenario, you will reduce your IRS debt by taking out a loan through a debt consolidation company. You will then be able to pay the IRS off immediately and will begin structured payments to the new lender. This option is primarily for those who are nearing a deadline or are receiving harassing phone calls from collection agencies. The benefits of debt consolidation is that it will put an end to the accrual of interest and fees set by the IRS.
One factor that will help to reduce IRS debt is to act quickly. Do not let the overdue balances fester. The longer you wait to confront the problem, the more potential complications you may face. Reducing IRS debt is time-sensitive in this way.
Whichever path you choose to try to reduce IRS debt, make sure that you have a firm grasp of your financial situation. You will want to know exactly how much money you can realistically spend to pay down the money owed.
If you do find a way to reduce IRS debt, be certain that you know what is expected of you. You may be required to make a single, reduced, lump sum payment. You may be tied to a long-term monthly payment plan. You may even be required to undergo periodic audits, or have your wages garnished.
The reward for facing the problem and finding a way to reduce IRS debt is the freedom to live how you want. During the repayment period, it is important to learn skills and habits that will prevent this situation from happening again.