How Does the Process Work?
When you owe the IRS back taxes, the first thing you should do is contact a tax professional. A tax pro can help you determine if you’re eligible for a tax settlement and, if so, how to go about applying for one.
If you qualify for a tax settlement, the next step is to fill out an Offer in Compromise (OIC) form. This form is used to request that the IRS accept your offer of payment for less than what you owe. Once you submit your OIC form, the IRS will review your case and make a determination. If they accept your offer, they will send you a letter outlining the terms of the settlement agreement. If they reject your offer, they will send you a letter explaining why.
If you have any questions about tax settlements or need help filling out an OIC form, please contact us. We’re here to help!
What Are the Different Types of Tax Settlements?
The IRS offers several types of tax settlements for taxpayers who cannot pay their taxes in full. The type of settlement you may be eligible for depends on your individual circumstances.
The three main types of tax settlements are:
1. Installment Agreement:
An installment agreement allows you to make monthly payments towards your tax debt. You will need to set up an automatic payment from your bank account or make payments by mail. To qualify, you must have filed all required tax returns, and your monthly payment must be equal to or greater than your current liability plus interest and penalties.
2. Offer in Compromise:
An offer in compromise (OIC) is an agreement between you and the IRS that settle your tax debt for less than the full amount you owe. To qualify, you must prove that you cannot pay the full amount of taxes you owe and that paying the reduced amount would not create a financial hardship.
3. Currently Not Collectible Status:
If you cannot afford to make any payments towards your taxes, the IRS may place your account is currently not collectible status. This means the IRS will temporarily stop collection efforts against you until your financial situation improves.
When Should You Seek Professional Help for Your Tax Settlement?
The answer to this question depends on a number of factors. If you are facing a significant tax liability, or if you have complex tax issues, it may be in your best interest to seek professional help. A tax professional can help you negotiate with the IRS and reach a resolution that is in your best interest.
If you are being audited by the debt settlement tax, it is also advisable to seek professional help. An experienced tax attorney or CPA can represent you during an audit and help you navigate the process.
If you are facing criminal charges related to your taxes, it is imperative that you seek professional legal assistance. Tax crimes are serious offenses and can result in stiff penalties, including imprisonment. Do not try to handle these types of cases on your own; always consult with an attorney who specializes in tax law.