What is Tax Debt Settlement?

Most individuals and organizations see tax as a financial burden. Many fail to pay taxes to the IRS or other tax authorities on time at least once during a lifetime. In the normal course of business, the late tax may be paid with a small penalty or interest. However, some individuals and companies may find themselves in a situation where it seems impossible to pay the full tax debt in the foreseeable future. This is where tax debt settlement comes in handy.

Tax settlement is the amount an individual or an organization may be ready (and able) to pay under current financial circumstances. Negotiations between the tax authorities, such as the IRS, and the taxpayer are carried out to reach an amount, which is considerably lower than the actual tax debt. This amount, if paid on time, results in settlement of all tax dues.

The obvious benefit of opting for a tax settlement is that you end up paying reasonably less than the actual amount. Moreover, it will also help you in avoiding a lien on your property or business, and provides complete peace of mind since your entire amount due with the taxing authority is clear as a result of reaching a settlement agreement.

Best Rated Tax Relief Companies:

Negotiating tax relief with the IRS can be a very technical matter. You need to have the right kind of professional help at your disposal in order to ensure the best possible settlement deal with the authorities. The number of self-proclaimed best tax relief companies and best tax settlement companies is huge in the United States; however, you need to be careful when choosing an appropriate tax settlement company for you.

When shortlisting the best tax relief companies, make sure you consider the track record and previous success rate in winning tax settlements. Today, many companies claim to be a Top-rated tax relief companies, but the fact of the matter is that very few have enough track record to prove their worth.

Remember that the best tax settlement companies are not those who write this title during their advertisement, but those who are also trusted by the IRS and other local taxing authorities. Be careful since the IRS has received multiple complaints in recent years, where different companies received thousands of upfront dollars from their clients in the name of winning out-of-the-box tax settlements but ended up running away from the case.

It is recommended that when you enter into a negotiation with the IRS with the help of your trusted settlement service provider, make sure to understand all your options and weigh them appropriately. For example, with a little push, the IRS may also allow you a payment plan as opposed to a lump sum payment. At the same time, make sure that you are fully updated with your current financial status and that all documents are readily available.

It is because the IRS will be interested in analyzing the current status of your assets, liabilities, and all income before accepting any final offer.

The success rate of tax settlement claims with the IRS is considered to be less than 10%. One of the several reasons associated with such low rates is related to how many inexperienced or fraudulent companies lure clients into making tax settlement claims without any real grounds. So, make sure that you are fully aware of your eligibility for the tax settlement option and that the company that you choose to represent you in front of the IRS is professionally equipped with all the essential resources and skills necessary to be successful.

If your application is rejected, you can appeal within thirty days using Form 13711
(Request for Appeal of Offer in Compromise).

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