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How to Start the New Year Off Right to Resolve Tax Debt

IRS Tax Fighters • January 10, 2025

The new year is here, and with it comes a fresh start for everyone—especially if you're facing tax debt. If you owe $10,000 or more in back taxes, the beginning of the year is a great time to take a step back, assess your tax situation, and develop a plan to resolve your debt. 


Ignoring tax issues may seem like an easier option, but the longer you wait, the more penalties and interest can add up. In this article, we’ll explain how starting the year with a clear plan in place can help you regain control of your finances and reduce the chances of your tax debt escalating.


Assess Your Current Tax Situation

If you’re carrying tax debt into the new year, the first step is to fully understand the extent of the debt. This includes knowing how much exactly you owe, any interest or penalties that have accumulated, and whether any collection actions have been taken against you by the IRS. The IRS may have already issued you warnings or collection notices, or they may be gearing up to take more aggressive steps if you don’t take any action.


Start by gathering all of your tax documents, including any IRS notices you’ve received, tax returns from previous years, and any statements regarding unpaid taxes. A clear understanding of your current tax status will help you know where you stand and what needs to be done.


Address Your Tax Debt Early

One of the most common mistakes taxpayers make is waiting too long to address their tax debt. The longer you ignore the issue, the higher the chances are of IRS collection actions like wage garnishments, bank levies, or tax liens. 


These actions can significantly damage your financial situation and credit score, making it even harder to get back on track. Now that it's a new year, you have a fresh opportunity to take control!
By addressing your tax debt early in the year, you give yourself more time to work with the IRS on finding a manageable solution. This could include setting up a payment plan, requesting penalty relief, or negotiating a settlement through programs like the Offer in Compromise (OIC).

Explore Your Tax Resolution Options
When it comes to resolving tax debt, there are several options available depending on your financial situation. Here are a few of the most common tax resolution options:

1. Installment Agreements
If you can’t pay your tax debt in full right away, the IRS allows you to set up an installment agreement. This is a monthly payment plan that spreads out the cost of your debt over time, often making it more manageable. The IRS offers different types of payment plans, including short-term and long-term options, depending on how much you owe and your ability to pay.

2. Offer in Compromise (OIC)
If you owe a substantial amount in taxes and are unable to pay it all, you may be eligible for an Offer in Compromise. This program allows you to settle your tax debt for much less than the total amount owed, but qualifying for it can be challenging. The IRS looks at your income, expenses, and assets to determine whether you’re eligible. A tax resolution professional can help you assess your eligibility and guide you through the application process.

3. Penalty Abatement
In some cases, the IRS will reduce or eliminate penalties if there is reasonable cause for your failure to pay or file your taxes. If you can show that your inability to pay was due to circumstances beyond your control, such as medical emergencies or a job loss, you may be able to have penalties reduced or waived. A tax relief professional can help you present your case to the IRS and increase your chances of having penalties removed.

4. Currently Not Collectible Status
If you are facing significant financial hardship, the IRS may place your account in Currently Not Collectible (CNC) status. This means that the IRS will stop all aggressive collection activities, such as garnishments or levies. While this status does not completely eliminate your debt, it provides immediate relief and gives you more time to stabilize your finances.

Seek Professional Help to Navigate the Process
The process to resolving tax debt can be complicated, and dealing with the IRS on your own can be overwhelming. Tax relief professionals like the ones at IRS Tax Fighters can help you navigate the various programs available to you and negotiate with the IRS on your behalf. They can also provide expert advice on the best strategy based on your unique financial situation.

Since they handle all the communication with the IRS, you don’t have to deal with the stress of trying to manage the situation alone. They will help ensure that you meet all deadlines, file all necessary paperwork, and protect your rights as a taxpayer.

Planning for the Future
Once your current tax debt is resolved, it’s important to implement strategies to avoid future tax problems. A tax relief professional can help you with tax planning to ensure you stay on track with your obligations moving forward. This may include budgeting for future taxes, keeping better records of your income and expenses, and making timely quarterly tax payments to avoid underpayment penalties.

Starting the year with a clear tax resolution plan can set you up for financial success in the months ahead. Addressing your back taxes now can reduce the stress and burden of dealing with the IRS later on, and it allows you to move forward with a clean slate.

Take Action Now
If you owe $10,000 or more in taxes, don’t wait until the IRS escalates collection actions. Start the year off right by seeking professional help to resolve your tax debt and find a manageable solution. 

Tax relief professionals like the ones at IRS Tax Fighters can help you understand your options and work with the IRS to find the best outcome for your financial situation.

The sooner you take action, the sooner you can get back to focusing on your life and your business without the looming threat of IRS actions. Contact IRS Tax Fighters today at 281-962-0070 to discuss your options and take the first step toward resolving your tax debt.

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