Resolve IRS Tax Debt

Quite a few individuals owe back taxes to the IRS that they are unable to pay. Countless numbers have had IRS levies put on their wages, bank accounts or are receiving intimidating letters. They live in anxiety about the IRS showing up at their door, or seizing their personal belongings. Some haven't filed taxes in several years. Many choose to ignore the IRS. Typically ignoring the IRS will make the situation worse.

You are allowed to hire an experienced professional to represent you before the IRS so that you will not have to deal with them. A tax professional with experience will know the tax laws and understand how to work those laws to the taxpayers advantage. A tax expert is able to evaluate the taxpayer's ability to pay the tax back immediately and also find out if they qualify to pay less than the full debt through one of the IRS programs.

There are primarily 3 IRS programs to settle a tax liability for less than the full amount that is owed:

An IRS Offer In Compromise

This is a onetime IRS tax settlement where the taxpayer and the IRS agree “to settle” the tax debt in a onetime settlement where less than the tax liability is paid. The IRS has very strict guidelines when submitting an Offer in Compromise. This includes disclosing financial and assets information. Either the taxpayer or the taxpayer’s representative will work one on one with either an Offer in Compromise tech or a revenue officer. That is why it is important to know the tax laws and the correct procedure and forms for submitting an Offer in Compromise. Individuals and businesses may submit an Offer in Compromise. An Offer in Compromise may also be submitted for a payroll tax liability. The entire process lasts anywhere from 6 to 9 months.

#2. Partial Payment Agreement

This is process where an installment is established to pay less than the tax debt because the tax payer can not make payments and pay the tax debt back in a regular installment agreement. It allows for monthly payments to be made that add up to less than the full tax debt owed. Financial disclosure will also be required for this agreement. The tax payer will also be subject to assessment by the IRS to see if they can raise the amount of the payment or terminate the arrangement due to a change in financial capability.

A Penalty Abatement

Penalty abatement allows the individual to remove all or part of the penalties owed. A penalty abatement will not eliminate the base amount owed and typically interest is not abated. "Reasonable Cause" must be given to the IRS as to why the taxes were not filed and/or paid. What the IRS considers “reasonable cause” is defined by general guidelines and is handled on a case by case basis.

Though seemingly a great way to eliminate tax debt quickly, not everyone qualifies for the aforementioned IRS tax settlement programs. Hiring a tax expert who will prequalify you based on your unique circumstances is imperative to getting the desired results.