Back taxes penalties can do more than just cost you money. They can damage your credit rating, endanger your assets, and ultimately disrupt your peace of mind. If you owe back taxes and back taxes penalties, knowing your options can help you get out of debt and regain control over your finances, your credit score, and your life.
Tax debt relief programs exist in many forms to help IRS debt settlements. By proactively pursuing and enrolling in such programs, you can help to avoid collection methods such as wage garnishment or property liens, as well as steer yourself away from the possibility of bankruptcy.
Programs such as “offer in compromise” can help to negotiate a lower amount owed in order to clear the debt against you. If collectors can be convinced that you will never be able to fully pay the taxes owed and any back taxes penalties you may have incurred, then collectors may be willing to compromise as to the total amount owed. (Be sure to consult a qualified tax professional before taking further steps. The possibility may exist that your back taxes penalties may be the result of an IRS error, and no fault of yours. By allowing the professionals to examine your case, you may find that your situation is not as dire as you once thought.)
However you decide to resolve your tax situation, always remember to address the factors that got you into trouble in the first place. Poor spending habits, lack of budgeting, and no savings buffer can all contribute to financial distress which, if left unaddressed, can recur again and again. In addition to your options for tax penalty resolution, your financial advisor can also direct you to credit counseling solutions, which can analyze your financial tendencies and recommend strategies to help you break the cycle of tax and credit problems, and get your money back under your control. References.