How to Settle Back Taxes

Dealing with the Internal Revenue Service, even when it comes to completing a standard tax return, is never easy. Additionally, if you are experiencing serious tax problems such as tax liens, salary garnishments or have received an audit notice, things can get even more complicated. Many Americans are unable to pay their outstanding tax bills and have run out of negotiation options with the IRS; however, there are ways to conquer this seemingly impossible feat with the help of a tax resolution firm.  

If you owe the IRS less than $25,000 in back taxes, a tax professional can help you qualify for an installment agreement which will allow you to pay your debt without interest and penalties. This IRS installment agreement is a compromise between an individual taxpayer and the IRS, allowing the taxpayer to pay his or her debt within five years. This agreement can be negotiated by your enrolled agent and is based on income, expenses and amount of debt.  

However, if you owe the IRS more than $25,000 in back taxes, you may qualify for an offer in compromise. When you are unable to pay the full amount owed to the IRS, or, after paying the full amount of debt the taxpayer will be in dire financial hardship, an Offer in Compromise can be negotiated. The IRS can settle, or "compromise", federal tax liabilities by accepting less than full payment under certain circumstances.

A tax debt can be compromised for one of the following reasons: doubt of liability, doubt as to collect liability, or the collection would create an economic hardship for the taxpayer. However, an OIC is difficult to qualify for making the process even more challenging. If you are going to get an offer in compromise accepted by the IRS, you will definitely need the help of a seasoned tax professional.

These are only two of the numerous ways that a taxpayer can alleviate their tax debt. If you or someone you know owes the IRS a large sum of money, you should consult with a tax professional who will go over the pros and cons of the options that are available to you. The professional and caring staff at 411 Tax Relief can work with you to find  the right solution to your tax problem.

For a free consultation, visit 411TaxRelief, fill out the information request form and a tax professional will contact you.


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