Paying Off Tax Debt in a Lump Sum
If you owe money to the IRS for taxes, you're going to want to take care of this as soon as you can. If you owe money to the IRS for too long, then it's only going to add up. You'll face a lot of penalties and as well as interest, and the amount you owe could get out of control. If you simply don't pay what you owe, then this could have some significant effects on your credit score as well as on your overall financial situation.
One option that you should take advantage of is paying off your tax debt in a lump sum. If you can afford to get rid of this debt all at once, then it is really going to be the best way to go about things. Not only is this going to improve your financial situation significantly, it is also going to take a lot of stress off of your shoulders. You won't have to worry about being delinquent if you read levy document fine print, and you can get back to focusing on the more important things in your life.
Know the Consequences
If you are considering whether to make a lump sum payment but aren't sure about it, then you may want to familiarize yourself with some of the consequences of not paying your back taxes. For one thing, your bank account could be levied and all of your assets frozen. If you fail to make payments to the IRS for back taxes or set up an appropriate plan, then the IRS has the right to take away money directly from your bank account. Your bank will be notified of this and after 21 days funds from your account will be released for payment.
Obviously, having your bank account levied is going to cause a lot of problems in your life. For one thing, it may leave you with no money at your disposal. You will not be able to get on with all of the daily aspects of life if you don't have any money to pay for them. Furthermore, it could cause you some serious problems if you have bills that are scheduled to be withdrawn from your account each and every month. As you can see, the consequences of this are severe, so you should make an effort to pay this off as fast as possible.
Finding Ways to Pay
Making a lump sum payment on your taxes might seem like an impossible thing, but there are some things for you to consider. One thing that you can do is make an Offer in Compromise. This is where you offer to pay a significant portion of your taxes all at one time, and you can thus negotiate a lower overall amount that you owe. The IRS is usually willing to negotiate on these matters, so you should speak to them and see what kinds of solutions that you can come up with.
One thing that may worry you about when paying off tax debt in a lump sum is where you can find the money to do so. For some people, the amount of taxes that they owe is a very large amount and coming up with that money all at once is something that could be difficult for you to do. To find the funds for this lump sum payment, you may want to consider getting a second mortgage on your home, or you may want to try and borrow some money from your family members or friends. Do what you can to find ways to pay.
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