Getting Professional Help - You can try to fight the IRS "toe to toe" without any help.
But you are not likely to succeed. There are too many laws and regulations that
ordinary taxpayers simply are not aware of. So where do you start when it comes to
settling your IRS tax debt? The best solution is a simple one. Consult with an IRS tax
professional that will negotiate with the IRS for you. Having a tax professional on
your side greatly improves your chances of winning and ultimately being approved
for the IRS settlement!
Another option for IRS tax debt settlement would be through an Offer in Compromise.
An IRS Offer in Compromise allows taxpayers that cannot afford to fully pay their
back tax liability, the chance to lower their due amount according to their financial
situation. The IRS looks at a taxpayer's past, current and future financial situation
when evaluating whether an Offer in Compromise should be accepted.
Bankruptcy. Typically bankruptcy is not the best settlement method to ever choose
because you owe taxes but sometimes it can help you settle if you owe other debts as
well. With Chapter 7 you can discharge all taxes owed if you meet strict requirements.
You will first be required to liquidate your assets in order to put that money towards
paying your taxes first and after that it is a possibility that any remaining can be
discharged. Other types of bankruptcy will require you to still pay back your taxes in
a form of a payment plan.
Before you begin on your quest for tax settlement as your preferred form of tax debt
relief, it is important to know the success rate. While it is true that you can actually
settle your IRS tax debt for less, the IRS does not "give up easily" on full collection of
past tax debt. In fact, fewer than 20% annually of all Offer in Compromise
applications submitted to the IRS are approved.
An installment agreement is the most common method for individuals to settle their
back taxes. You will be required to make monthly installment payments of a minimum
amount. With an installment agreement you will end up paying more than the original
amount owed because you will still have to make interest payments. An installment
agreement should be used if you cannot pay of entire amount owed in full but have
the means to pay off over time.
It's Just The Start of Your Road to Recovery: Getting your offer in compromise
approved is only the beginning of your road to recovery. When your tax debt
settlement is approved you are entering a 5 year contract with the IRS.
Most people find that working with a firm that specializes in IRS tax settlement
actually saves them not only time and stress but also a significant amount of money.
Just be certain to "do your homework" before retaining the services of an IRS tax
relief firm. You want to maximize your chances of success to settle your IRS tax debt
for as little as possible. The health of your financial future may hang in the balance.
You must also keep some common IRS tax settlement roadblocks in mind before you
submit your offer. First, are you up to date with filing your taxes? If you are not, your
offer will be rejected. The second issue is bankruptcy. If the IRS finds out that you
have filed for bankruptcy at or around the same time you submitted your Offer in
Compromise, your tax settlement offer will be denied. Finally, you need to remember
that an IRS tax lien will not be removed when you submit your offer. Tax liens, with
few exceptions, are only released when the tax debt is completely satisfied. The tax
lien will remain until after your tax debt is paid off.
You can avail of a payment plan for your back taxes and get all your penalties
eliminated with professional help. Handling your tax problems yourselves may result
in frustration or negative results.
Samuel Landis possesses a masters degree (LLM) in addition to his law degree. He
has been one of the pioneering and driving forces in IRS controversy resolution. He
has developed many new techniques to resolve IRS matters in a variety of ways that
are effective and efficient for both client settlement and IRS processing. As a highly
rated tax law professor for over 11 years, Samuel Landis has had the respect and
integrity to push through many advancements in IRS settlement techniques. He has
gained an extraordinary reputation for his creative solutions to resolving the most
difficult tax problems. Visit an Experienced IRS Tax Attorney.