How the IRS Tax Obligations Differ From Student Loan Debts
We can definitely say that the IRS is much more reasonable as opposed to student loan debt industry when it comes to settling old debts. Generally speaking, you get several options to clear most your IRS tax problems but in the student loan marketplace we will not get that many solutions to pay back. Listed here are the important three factors that shows why it is little easier to deal with IRS unpaid taxes when compared with unpaid education loans.
The IRS has only 10 years from tax assessment date to collect your tax dues. This is really a significant advantage to the taxpayer. After that time frame, they no longer can recover the debt but there are certain events which could stop the 120 month clock from running. For instance, if you are in another country or if there is any lawsuit filed by the IRS against you, then they can extend the clock longer than 10 years. But in terms of student loans, almost nothing can help you to escape from it. Federal student education loans won’t get discharged even if you file for bankruptcy. Student loan debt will become a significant problem when you don’t pay back it on time.
Next, the IRS taxing authorities consider your current financial situation and will come up with an affordable plan after determining your ability to pay the debt owe to them. Even when everything appears dismal, the one solution that can give hopes is the IRS Offer in Compromise (OIC) program. This program is a great way to have a fresh start with IRS and take care of all of your tax payment issues. The only realistic choice we could have in student loan debts is full or partial deferment on the repayments.
Any tax debts that are over three years old are dischargeable in Chapter 7 bankruptcy provided you filed tax returns for the previous two years. Chapter 7 helps taxpayers to get full discharge of allowed debts. To qualify for this, the taxpayer should not be found guilty for any intentional act of evading the tax laws and further his/her tax return cannot be deceptive or frivolous. You can place student loan payments in Chapter 13 plan and you have to pay off in 60 months. But still you will need to pay back 100% of the student loans.
While the IRS horror stories appears very bad as they seem, but when compared to education loan debts there are some protection to taxpayers in handling non- payment of taxes. You have three great options to help you in paying back your IRS tax debt and you’ll never be drowned in it. With student loans, you are tied to them for life and you can’t get away. Though IRS has horrible reputation, you have at-least a good number of choices to help you out.