Are you curious about the state of IRS Tax Settlement
in 2020? Then look no further. We’ve curated, vetted, and categorized a list of up-to-date stats and information below.
Click to jump to a category, or keep reading for our top IRS Tax Settlement statistics and information.
What Is A Tax Settlement?
Do you wonder what Tax Settlement is? You have come to the right place.
A tax settlement is an arrangement that is acceptable to the IRS and permits a taxpayer to retire a tax debt for less than the pristine amount owed.
Taxation ascendant entities sometimes allow this type of tax settlement when extenuating circumstances subsist that would obviate the taxpayer from honoring the full debt.
While not all the situations are suitable for interlocking in a tax settlement process, people who owe taxes pretty often notice that the authorities are ready to investigate the situation to determine if a tax settlement can be considered.
The Truth About IRS Tax Settlement Firms
People and businesses with excellent tax balances can face critical punishments from the IRS, including the eventual capturing of the assets in some cases. To deal with this problem a new type of business comes up to help taxpayers cope with their tax debs.
Known commonly as tax settlement firms, these entities claim they can either drastically reduce or completely eliminate whatever the client owes the IRS. But can these firms really deliver what they promise or is it buyer beware? This article examines how tax settlement firms work and their success rate. Read on to find out more.
The bottom line is that the tax business is filled with danger. Those who need help with their tax balances should have their tax advisors refer them to a good, experienced tax attorney
How to Negotiate Your Back Taxes With The IRS
The most important question is will the IRS negotiate back taxes? Yes, the IRS has many different types of options for people in debt. Before doing anything you just have to ask yourself 3 simple questions:
- How much money do I owe the IRS?
- Do I have a good understanding of my financial situation?
- What is the best suited IRS relief program?
The best-case scenario is to consult a tax attorney to guide you through the process. Let me save you some headache and show you the most common situations:
- Negotiate a debt settlement through an Offer in Compromise
- (OIC) Doubt as To Collectability or Doubt as To Liability
- Bargain for a time through Installment Agreements
- Argue for penalty removal through Penalty Abatement
- Request an audit reconsideration if the tax liability is incorrect
- File an amended return
If you still need help finding solutions to your problem click here
How to Settle Tax Debt?
A lot of people are asking me if it’s possible to settle IRS tax debt
and today I will show you exactly how to do it.
The most common way is to use an Offer in Compromise a.k.a OIC.
This solution doesn’t cost any money but the IRS doesn’t just hand OICs out to everyone that requests one. You have to have a reasonable explanation about why you can’t collect the full amount you owed.
Check step by step process on how to settle tax debt:
- First, you apply for an Offer in Compromise (OIC) using Form 656.
- You must pay a $186 application fee to apply.
- You must also provide a full financial disclosure that details all your income, expenditures, assets, and equity.
- For wage earners and self-employed workers, you then must complete Form 433-A the “Collection Information Statement”; you also will need to submit supporting documentation.
- The IRS reviews your application package. If it’s accepted, settlement negotiation begins.
- You and the IRS come to an agreement of what percentage of your back taxes you can afford to pay back.
- Then once accepted, you have 2 years to repay that amount.
You must continue to file taxes for each new year. If you receive a refund from filing within that two-year period, the IRS will apply it towards your settlement.