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What if it's the IRS that you owe?

What kind of debt relief is there if you owe money to the Internal Revenue Service? While there is actually some relief available from Uncle Sam, it comes in the form of a payment agreement rather than a debt discharge. While you can negotiate -- often with the help of a tax attorney -- your IRS debts, you can't get out of them via bankruptcy.

So, what do you do if you can't pay your income taxes? First, do file your return. The penalties for not filing are typically more than the interest and penalties that accrue if you don't pay immediately. You can also apply for an extension to file your return by October instead of April during the year if you aren't ready to file yet.

You can apply for an installment agreement with the IRS, often paying your tax burden off over several or more months. You can't do this every year, though, and there are some factors that will decide if you are eligible for such an agreement.

Finally, if you can't pay your tax bill, consider whether your overall finances are a contributing factor. Are you dealing with other debt that makes it impossible to take on any other burdens? If you are struggling to pay other debts, then working to clear those debts might actually free up some of your income to make the payments to the IRS.

If you can't pay any debt that you owe and are facing wage garnishment or other debt collection practices by the IRS or anyone else, you have some options. Consider speaking to a Washington debt attorney today who can help you understand options such as bankruptcy.

Source: Money, "What If I Cannot Pay What Taxes I Owe?," accessed March 04, 2016

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