(ThyBlackMan.com) Are you getting delinquent in your credit card bill payment? Do you think that you won’t be able to pay your creditor back? If so, you can take a new move by transferring your obligation from your credit card company to the IRS. However, you are going to be dare- devil if you look upon this as a federal debt relief programs. Generally, IRS have more power and authority to screw your life in case you get in a tussle with them regarding your tax debt. Unlike your private credit card company, IRS never writes off your debt. So, you may be thinking then why should you take such daunting step?
You can expect to get several befits by this plan if you are willing to co-operate with IRS tax collecting officials. They can readily help you get out of 
your problem if you are sincere about paying their tax debt. Through negotiation you can even reduce the actual amount of debt and can pay less than you owe. Let us see how your master plan can work in favor of you.
In order to get a ‘charge off’ notice from your credit card company, you need to default on your account. But if you are current on your payment, you can not make your creditor agree to charge off. Therefore, you must notify your creditor in writing that you are unable to make further payment and frankly tell them that you will stop payment from the next installment. Also tell your creditor to stop contact you over telephone. Ask them to make all communication via certified email. This way you can avoid creditor harassment.
Note that you can charge off your debt on the unsecured loan if you have secured loan also. Your creditor will assent on your proposal and charge off your debt, if you retain another account with them as secured loan. ‘Charge Off’ implies that your debt will be deemed as ‘bad debt’ by your creditor and he will show this record to the IRS. However, once your debt is charged off, you will get a 1099-c form from them, acknowledging your debt being written off and canceled.
Now, the real game starts. Your entire charged off debt will be deemed as income by the IRS. This time onwards you will be liable to the IRS to repay your debt. However, since your debt is now being considered as income, the tax will be calculated on this amount. And it will be a fraction of your total forgiven debt. If you applied for any special tax benefit for that tax year, you can also reduce the tax amount further.
Note that if your forgiven debt is a gift on the part of your creditor, you do not have to pay IRS for this.
Written By Myrina Stein
