When it comes to the tax settlement of an IRS Tax Debt there are many options. It is best that you understand all of your available options. You need a plan of attack to resolve your Tax Debt. First and for most, be sure to consult with a Tax Professional before you make contact with the IRS.
Below are brief explanations of the 5 most common methods used to resolve an IRS Tax Debt.
Offer in Compromise
An IRS Offer in Compromise is an IRS program that allows individuals to settle tax debt for less than the total amount originally owed. Whenever you hear the saying, "Settle for Pennies on the Dollar", this is the method that is used. It shouldn't come to a surprise that this is the hardest settlement to reach with the IRS. The IRS has strict requirements to qualify for an Offer in Compromise. The purpose of an Offer in Compromise is to find a compromised or settlement amount that works for you, the tax payer, and the IRS. The IRS will settle your Tax Debt for less money if you can show that the debt collection will cost more than the actual debt.. An Offer in Compromise would be a good method of settlement if your total equity you have in assets is worth less than the tax amount owed.
IRS Installment Agreement / IRS Payment Plan
An IRS installment agreement / IRS Payment Plan is the most common method for individuals to settle their back IRS Tax Debt. With an IRS installment agreement, you will be required to pay monthly payments towards your IRS Tax Debt in a period of less than 3 years. With an IRS installment agreement you will still have to pay interest on the amounts owed plus any penalties you may have received. You will end up paying more than the original tax amount owed. An IRS installment agreement should be used if you cannot pay in full your IRS Tax Debt but you do have the ability to pay the IRS off over time in smaller monthly payments.
Before you enter into an IRS Payment Plan, consult with us at FLAT FEE TAX SERVICE.
Delay the IRS
If you need more time to pay the full amount of the Tax debt, delaying tactics can easily implemented by using the professionals at FLAT FEE TAX SERVICE knowledge and understanding of the IRS system to your advantage. When the IRS realizes that you have a tax debt, the IRS will begin by sending their automated notices to you. There are a series of letters that the IRS sends before it actually takes actions against individuals to collect.
Typically the IRS sends an original assessment letter stating the amount of tax owed plus any interest and penalties then it will send a series of four CP Letters (CP1-4, as noted in upper right of letter). There are defensive actions that can be taken with each and every letter.
FLAT FEE TAX SERVICE will delay the IRS from taking collection against you and buy you more time.
The professionals at FLAT FEE TAX SERVICE know how the IRS procedures operate and we are well versed in delaying the IRS from taking collection against you. Knowledge is power.
Currently Not Collectible / Currently Uncollectible
This method doesn't settle your Tax Debt, but it puts a hold on collections. When you receive currently not collectible status, the IRS will temporarily stop collection activities against you. The IRS will require that you submit an updated financial statement every year to see if your situation has improved enough for them to go after you and collect your Tax Debt.
As long as you are in a Currently Not Collectible status, you will not pay the IRS for your Tax Debt. One thing to keep in mind is that the statute of limitations is still running and the IRS has 10 years to collect back taxes from the year they were filed or assessed. If 10 years pass by and they have not collected, you no longer owe that amount.
An IRS Tax Professional will have the highest success rate for getting you an Offer in Compromise settled and accepted by the IRS. Before you enter into a payment plan with the IRS, you should consult with a Tax Professional. Most IRS Tax Professionals will offer a free consultation that will provide you your options, likely outcomes and cost.
Every year thousands of people settle their unpaid back taxes with the IRS. Will you be one of the many people that we, at FLAT FEE TAX SERVICE, help to resolve their IRS Tax Debt?
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Flat Fee Tax Service Guarantees to Have an IRS Levy Released in 1 to 2 Business Days or You Don't Pay.