IRS Tax Debt Relief
When it comes to dealing with IRS tax debt, you have many options. Below are details of many of the options you can use to settle your tax debts and get on a good standing with the IRS. The IRS has a lot of power when it comes to collecting your unpaid taxes. Make sure you are informed about your options and don't let the IRS get the best of you. Below is a solid list of your options for dealing with your tax liability, as well as links to all relevant IRS forms you need to fill out to request these types of relief. Also, if you are having trouble doing it on your own, you can request help with back taxes from a tax debt specialist to find out your options.
Solutions to Prevent IRS from taking action
There are actions you can take to prevent the IRS from taking action against you to collect IRS taxes.
Setting up an Installment agreement with the IRS
The IRS knows that there are some individuals who just cannot pay the entire tax liability that they owe. In these cases the IRS will work with individuals to set up payment plans to ensure that they receive the total payment over a given period of time instead of a lump sum payment. These payments allow the tax payer to make smaller, more manageable payments to the IRS.In order to qualify for one of these agreements you will need to fill out IRS Form 9465. Installment Agreements are a good option if you cannot pay the bill in full. Know that there are additional fees that are to be paid for this type of offer. The benefit of setting up an installment agreement is that you will not be slapped with IRS penalties and additional interest, and they cannot place levies, or take other actions against you if you have this agreement setup and you are making your payments on time.
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Partial Payment Installment Option
Partial payment installment option is similar to an installment agreement however, the tax payer is not required to pay as much in taxes every year. With this method, the tax payer goes under review every two years. If their condition is changed they can have their payments increased or it could lead to a termination of the agreement.This method is similar to Method 1 by setting up a monthly payment plan for the individual tax payer, but the tax payer does not pay off the entire amount owed in taxes. Under this method the tax payer goes under financial review every two years and this could increase the payment owed by the tax payer or the agreement could be terminated if the tax payers condition improves.
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Offer In Compromise
An offer in compromise is an agreement between the IRS and the Tax payer that resolves a tax payers debt, normally for less than the amount that is owed. An offer in compromise is rarely accepted by the IRS. The IRS would much rather have individuals pay off tax debts in full, however, they realize that with some individuals this may not be possible. With an offer in compromise, the IRS and the individual come to an agreement on the final tax liability owed.
This is normally a last resort solution that the IRS will accept. The IRS will want you to attempt an installment agreement first or a partial payment installment option. The IRS requires you to meet specific requirements to qualify for an Offer in compromise. The following are the requirements:
1."Doubt as to Liability" - the IRS is not sure if the total tax liability is accurate
2."Doubt as to Collectibility" - the IRS doesn't think total tax amount owed can be paid by taxpayer
3."Effective Tax Administration" - IRS is certain of taxpayer's total liability and ability to pay, but under special circumstances considers an OIC. An OIC only becomes a reality if the taxpayer can reason that the tax liability will create financial problems for them and therefore is unfair and unjust.
If you think you meet the requirements you can fill out IRS Form 656. Many times filing for an OIC requires help from a professional tax specialist.
More information on payment plans that are offered with an offer in compromise can be found here: Payment Plans with an Offer in Compromise
This is normally a last resort solution that the IRS will accept. The IRS will want you to attempt an installment agreement first or a partial payment installment option. The IRS requires you to meet specific requirements to qualify for an Offer in compromise. The following are the requirements:
1."Doubt as to Liability" - the IRS is not sure if the total tax liability is accurate
2."Doubt as to Collectibility" - the IRS doesn't think total tax amount owed can be paid by taxpayer
3."Effective Tax Administration" - IRS is certain of taxpayer's total liability and ability to pay, but under special circumstances considers an OIC. An OIC only becomes a reality if the taxpayer can reason that the tax liability will create financial problems for them and therefore is unfair and unjust.
If you think you meet the requirements you can fill out IRS Form 656. Many times filing for an OIC requires help from a professional tax specialist.
More information on payment plans that are offered with an offer in compromise can be found here: Payment Plans with an Offer in Compromise
Innocent Spouse Relief
Innocent spouse tax relief is a form of tax relief offered by the IRS for people who filed a joint tax return with a spouse or ex-spouse and are burdened with tax debt through the fault of their spouse. Certain criteria must be met in order to qualify for this type of relief. The following are the requirements for innocent spouse relief:
1. You filed a joint return which reported an understatement of tax as a result of erraneous items of your spouse or former spouse.
2. The time you signed the joint return, you did not know, or did not have any reason to know, that there was an understatement of tax.
3. Based on the circumstances, it would be unfair to hold you liable for the understatement of tax.
To determine quickly if you have a good probability of qualifying for this type of relief try out the Innocent Spouse Relief Qualification Tool. Answer a set of basic questions to see if you have the right basic qualifications to receive innocent spouse relief.
If you feel you qualify for this type of tax relief you can file for it by filling out IRS Form 8857. If you do not know if you would qualify you can get a free consultation from a tax debt specialists to determine your options.
The IRS has made many provisions to innocent spouse relief over the years and if you do not qualify for this you may qualify for Relief by separation of liability or Equitable Relief
To see a Squidoo page all about this topic please go here: Innocent Spouse Relief
1. You filed a joint return which reported an understatement of tax as a result of erraneous items of your spouse or former spouse.
2. The time you signed the joint return, you did not know, or did not have any reason to know, that there was an understatement of tax.
3. Based on the circumstances, it would be unfair to hold you liable for the understatement of tax.
To determine quickly if you have a good probability of qualifying for this type of relief try out the Innocent Spouse Relief Qualification Tool. Answer a set of basic questions to see if you have the right basic qualifications to receive innocent spouse relief.
If you feel you qualify for this type of tax relief you can file for it by filling out IRS Form 8857. If you do not know if you would qualify you can get a free consultation from a tax debt specialists to determine your options.
The IRS has made many provisions to innocent spouse relief over the years and if you do not qualify for this you may qualify for Relief by separation of liability or Equitable Relief
To see a Squidoo page all about this topic please go here: Innocent Spouse Relief
Innocent Spouse Relief Book from Amazon
Tax Debt Consultation
If you are unsure of what IRS tax solution would work for you, it would be smart to sign up for a tax debt consultation. These consultations are free and are given by IRS tax debt specialists who are professionals in IRS tax law. The initial consultation is always free, but if you decide to go with some or one of the options that they suggest and you decide to use them for help, there will be a fee associated with it. Sometimes these fees can be flat fees or they can be a percentage of that tax relief settlement. Most of the time, even though there is a cost, the final result will still leave you with far less of a tax liability than you originally started with.
Please see the section below on getting connected with a tax debt specialist.
Please see the section below on getting connected with a tax debt specialist.
Bankruptcy
Bankruptcy should be the last option that anyone should use. It will have a serious impact on one's credit and will hurt an individuals ability to get financing in the future. This option should only be used if all other options are exhausted. When bankruptcy is filed, tax debts maybe be wiped cleaned when you file for Chapter 7 or Chapter 13.
If you have not done so already, you should get connected with a
tax debt specialist and have them work with you to settle your tax liabilities. Most tax specialists are experts in IRS tax law and have a very successful track record at resolving tax liabilities for a fraction of what is owed, especially when an individual is to the point of considering filing for bankruptcy.
If you have not done so already, you should get connected with a
tax debt specialist and have them work with you to settle your tax liabilities. Most tax specialists are experts in IRS tax law and have a very successful track record at resolving tax liabilities for a fraction of what is owed, especially when an individual is to the point of considering filing for bankruptcy.
How To Find Tax Help Online
You can easily find a tax specialist to help you online by using your favorite search engine and typing in "tax debt relief" or you particular tax debt problem. You will find most of these companies will offer the same thing. They will want you to fill out a simple contact form at first or call them up to give your basic tax information. You will then be match with a tax specialists based on your particular situation and will normally be contacted back within 1 to 2 days. A few good companies to go with are the following.
- Innocent Spouse Relief InnocentSpouseRelief.com - Will give you a consultation to see if you qualify for innocent spouse relief, equitable relief, or separation of liability. Will still help you with another solution if you don't qualify for any of the options though.
- Back Taxes Help BackTaxesHelp.com - Website that contains details on solving just about any problem relating to back taxes for state and federal back taxes problems
Ezine articles on Tax Debt Relief
- 5 Methods to get out of Tax Debt
- When an individual has tax debt their options depend on their unique situation. There are 5 key methods to getting out of tax debt and only some may apply to an individual depending on their current financial situation. The following methods are ways to alleviate tax debt if the full amount cannot be paid immediately.
- Some Guidelines for Dealing With Tax Debt
- Many individuals are plagued by tax debt. The accumulation of tax debt can be very stressful but rest assured there are tax debt professionals available if you feel you cannot attack the debt yourself. Many companies provide tax assistance, and solely specialize in tax assistance so they are skilled in getting the IRS off your back. Below are some general steps or guidelines to help you get out of tax debt.
- Online Tax Debt Help- How It Works And How To Get the Best Solution
- The internet has made it extremely easy to find tax debt help online from excellent specialists. Learn how to utilize the internet to get free consultations from a relevant specialist for your specific situation. Understand the normal process and know what you should expect.
- IRS Wage Garnishment - How It Works, How To Prevent, How To Get Released
- Wage Garnishment is a common way for the IRS to collect unpaid taxes. This forced recovery mechanism imposed by the state or federal tax collectors can be be a major nuisance for individuals. Wage garnishment doesn't take into consideration that some months you will need more money than others, it just takes what in can until all taxes are recovered. Understanding how this works and understanding other options available can help you prevent or get a wage garnishment lifted. There are also companies available that specialize in this type of situation and can work with you to get a more manageable outcome.
- Payment Plans With An Offer In Compromise
- As a result of TIPRA or the Tax Increase Prevention and Reconciliation Act passed in 2005, the IRS will accept three payment methods or plans with an Offer in Compromise (OIC).
- Top 5 Ways to Settle Back Taxes
- When it comes to settling IRS back taxes there are many options. It is best that you learn all available options and see what fits your individual situation the best before setting up a plan of attack.
- Finding a Professional to Help with Back Taxes
- More than ever, Americans are having problems with back taxes. With the increasing complexity of tax laws every year more individuals are running into issues with the IRS. Many times it can be very difficult to take on the IRS on your own and with the complexity of many issues it is a good idea to hire a tax professional to handle those complex issues.
- How To Delay IRS Collections
- Information on how the automated collection system of the IRS works. Use this information to your advantage to delay IRS collections in order to gather money to pay off IRS Back Taxes.
- Settling Back Taxes with an Installment Agreement
- Installment agreements are the most common method for settling back taxes. Find out what is involved and how it is done.
- 3 Options with a Federal Tax Lien
- You have three basic options when dealing with a tax lien. It is important to take the right actions to prevent a lien from turning into a levy and having the IRS start seizing your assets.
Tax Help Comments/Questions/Feed Back
backtaxes wrote...
Lots of good info here on resolving tax problems. Another article that would be a good read for your reader would be this one on tax settlements
Posted June 23, 2009
pic539 wrote...
This was good info but I do have a small quibble concerning this: "The benefit of setting up an installment agreement is that you will not be slapped with IRS penalties and additional interest, ".
I worked for the IRS for 25 years, approximately 10 years spent in setting up installment agreements. Late payment penalties and interest are charged until the balance is paid in full (similar to a loan or credit card balance). When you enter into a payment plan, the penalty is reduced so long as you continue to make your monthly payments on time. Interest charges are mandated by law and can't be reduced. Once your balance is paid off, if you believe you have a good reason to request removal of the penalty (reasonable cause) you can submit your request in writing and IRS will make a decision on it. Your best bet to reduce the amount of interest and penalties you have to pay is by making the largest payment you can each month.
Posted June 18, 2009
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