HOW TO SETTLE YOUR TAX DEBT WITH IRS FOR PENNIES ON THE DOLLAR – IRS HELP
You’ve probably seen the commercials on television: A pitchman says that you can settle your tax bill for “pennies on the dollar.”
All you have to do is hire the law firm in the commercial and they will use their special negotiating skills and inside knowledge to get you off the hook with the IRS.
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In real life, however, it’s not so easy to get the IRS to settle a tax debt for pennies on the dollar. It does happen, but only in cases where a taxpayer clearly does not have the assets and/or income to pay off the tax debt in a reasonable time.
If you have the money to pay the IRS–or will likely have it in the future–no amount of negotiating will convince the IRS to settle for less than you owe. This is so whether you represent yourself or hire a high-priced law firm.
What these commercials are talking about is getting the IRS to accept an offer in compromise. An offer in compromise–“OIC”–is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS will accept your OIC only if you convince it that:
you aren’t able to pay the full amount in a reasonable time, either as a lump sum or over time through a payment agreement there is doubt as to the amount of your tax liability (unusual), or due to exceptional circumstances, payment in full would cause an “economic hardship” or be “unfair” or “inequitable”– for example, you can’t work due to health problems, or you’d be left with no money to pay your basic living expenses if you sold your assets to pay your tax bill in full.
To make this determination, the IRS looks at your income and assets to determine your “reasonable collection potential (RCP).” You must provide detailed information about your financial situation on IRS Form 433-A (individuals) or Form 433-B (businesses), Collection Information Statement.This includes verifiable information about your cash, investments, available credit, assets, income, and debt. In addition to property, the RCP also includes your anticipated future income, less amounts allowed for basic living expenses. You can use the Offer in Compromise Pre-Qualifier on the IRS website to determine whether you are eligible and prepare a preliminary proposal.
You will need to come up with a minimum offer amount as part of your OIC. This is the minimum amount the IRS will accept and is based on the financial disclosures you make in your Form 433. Basically, your offer must equal the net realizable value of your assets plus your excess monthly income after subtracting your monthly expenses. You then multiply this number by 12 or 24, depending on which payment period you choose (either five months or two years). You can follow the instructions in Form 433 for calculating your minimum offer.
Before you submit your offer, you must (1) file all tax returns you are legally required to file, (2) make all required estimated tax payments for the current year, and (3) make all required federal tax deposits for the current quarter if you are a business owner with employees. If you or your business is currently in an open bankruptcy proceeding, you are not eligible to apply for an offer. Your debts need to be resolved in your bankruptcy proceeding–that’s what bankruptcy is for.
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If all of this seems too overwhelming, then hire a team of professionals to take care of this responsibility for you. Call Advance Tax Relief for a free consultation at 800-790-8574.
We are tax relief experts specializing in IRS back tax help, Installment Agreements, tax lien help, wage garnishment release, IRS Offer in Compromises, tax debt forgiveness and a whole lot more. Get a free consultation from an experienced tax relief expert today (800)790-8574
Some Recent Tax Settlements:
Mr. Dillard – CA Owed $6884, IRS settled for $400
Mr. Batiste – LA Owed $18513, IRS settled for $2972
Mr. Johnson – CA Owed $21,378, IRS settled for $4500
Ms. Gonzalez – TX Owed $28,816, IRS settled for $1700
Mr. Anthony – NY Owed $14,000, IRS settled for $900
Mr. Wilkes – CA Owed 32,211, IRS settled for $1250
Owe the IRS and need help? Call us to discuss your unique situation with Top Tax Attorney or IRS Enrolled Agent (800)790-8574 or visit http://www.advancetaxrelief.com
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