The United States government is the most powerful in the world, and the IRS is among the most powerful departments of the US government. So, of all the debts you can possibly owe to anyone, you don’t want to get in trouble with this department. Let’s be honest, no one likes paying taxes. Every year millions of Americans file and pay taxes with a heavy heart. Of these millions, a big percentage of taxpayers try to come up with best excuses to minimize or avoid tax liability, but they often fail as the IRS is always vigilant.
Individuals as well as businesses also come up with all sorts of schemes, frauds and ways to not pay taxes. However, only once in a blue moon can someone fool the revenue collecting agency.
You may also have heard about tax settlement, which is a legal way of paying less than originally owed to the IRS.
In fact, the IRS itself allows tax debt settlement. It is due to this legitimacy that tons of tax accountants and firms advertise tax settlement services, and claim to guarantee tax settlement (sometimes up to 80% of the original amount). It is only natural for someone knowing the ruthlessness of the IRS and seeing bombardment of these ads to question the authenticity of tax settlement claims.
Does the IRS Really Allow Tax Debt Settlement in Valencia, CA?
So, does the IRS allow debt settlement in Valencia, CA, as well as other parts of the country? A simple answer to this question would be ‘Yes’; however, it may not be as simple. There is a need to understand the way the IRS processes tax debt settlement claims.
It has been estimated that, during 2017, over 16 million individuals owed tax to the IRS, while only 25,000 of these taxpayers got offer-in-compromise (OIC) which is the most common form of tax debt settlement relief. This comes down to just over 1.5%. While this is not an encouraging percentage, it should not be completely discouraging for those having a genuine case.
The fact of the matter is that the IRS just does not go around allowing tax settlement to people out of pity or good paperwork. Instead, one needs to prove genuine lack of ability to pay full amount in the near future.
Criteria To Get Tax Settlement Relief
Basically, in order to get tax settlement relief, you need to prove that your net assets and monthly disposable income is less than the overall tax liability. While proving it is not an easy task (as it requires a lot of paperwork as well as thorough understanding of relevant rules to calculate net assets and disposable income in line with the IRS), it is pretty much doable as long as you have a genuine case.
Remember that with an offer-in-compromise tax settlement relief, you may get anywhere from 20 to 80% off on your original tax liability. However, you must have the resources and willingness to pay the reduced tax amount in order to settle the tax liability.
What You Should Do if You Think You Qualify For Tax Debt Settlement?
Do you think your case may qualify for tax debt settlement? It is recommended to get in touch with a professional tax settlement accountant to evaluate your situation (often during a free consultation session). In case you don’t actually qualify for a tax settlement program, you may still want to consider other options to better manage your taxes. For example, the IRS is usually kinder when it comes to allowing an installment plan on your taxes.
A professional tax accountant shall evaluate your individual situation and guide you about the most suitable option for you to apply to the IRS.
Zee Maq is a content writer who specializes in writing business and finance content. She has nine years of experience and loves to provide problem-solving content to help people tackle challenges in their everyday lives.