tax debt

The first requirement for resolving an IRS or state tax debt is tax compliance. Contrary to what many people think, if you owe back taxes, your first priority should actually be paying the current year. Those that don't withhold or pay their current taxes often find themselves in a vicious cycle of constantly struggling to re-pay back taxes and continually owing when it comes time to file again.

The information below contains information about the various collection procedures used by the IRS and State tax agencies to collect outstanding tax debts.

In addition to assisting taxpayers with IRS tax debts, Washington Tax Services also offers tax help for taxpayers who owe money to their State. Every State has it's own taxing agencies and tax collection branches. Collection policies and procedures vary widely from State to State. However, because of the success of many of the IRS' tax resolution procedures, such as the Offer in Compromise Program, many states have implemented similar procedures to help taxpayers resolve their past due tax debts.

IRS Collection Statute Expiration Dates

The Collection Statute Expiration Date (CSED) for IRS taxes is, in most cases, 10 years. Once this Statute period has run, any remaining tax debt is forgiven. The statutory period begins on the date the tax debt is assessed which is usually shortly after a taxpayers returns are filed. If a taxpayer never filed their returns the Collection Statute would begin on the date that the IRS creates a substitute return (SFR) for the taxpayer.

The Offer in Compromise is the most straight forward and effective method of seriously reducing your tax debt. If you qualify for an Offer in Compromise, you will only be required to pay a small fraction of what you currently owe to settle your tax debt for good. The Offer in Compromise program is offered by the IRS and also by many states.

The great part about this is that once your Offer in Compromise is signed and accepted, the IRS cannot come back and change your payments or charge you additional interest or penalties for the tax years you settled on.

Credit, the word gives a sigh of relief to you when money is needed the most. You just pick you credit card and slide it to purchase whatever item you like. At that time it behaves like magicians rod, just move it and you get what you need. But the same word can sometimes increase your blood pressure when you are not able to pay back the magical amount you took from the credit card company and then the only way of for you is debt settlement. Though it sounds like a court settlement but is poles apart from that.