How to Reduce your IRS Tax Debt – Former IRS Settlement Agent – Affordable
How to Reduce your IRS Tax Debt – Through an Offer in Compromise
We are true affordable tax experts.
IRS accepts 38% of all offers in compromise.
The statistics for accepted settlements has risen through the years.
About five years ago the IRS only accepted 18% of all offers in compromise. IRS wants offers in compromise, they want to settle your case. However, you must qualify.
If you are thinking of filing to reduce your tax debt through an offer compromise it is essential you use a professional tax firm.
I say this because I am a former IRS agent, teaching instructor who worked and settled cases with the Internal Revenue Service.
Offers filed by individual taxpayers usually have little chance of acceptance because of the stringent rules of the IRS. Taxpayers choosing a good professional tax firm who charge reasonable pricing will have the best chance of reducing their IRS tax debt.
Note : All accepted offers in compromise are open to public inspection at regional offices for one year
As a former IRS agent the question I am most often ask is simply this,” how can I reduce my IRS Tax Debt”?
The only way you can reduce your IRS tax debt is to:
- file an amended return if applicable,
- have the statute of limitations expire on your case,
- abate penalties and interest, or
- file an offer in compromise to settle your debt for pennies on the dollar
The offer in compromise program is one that you hear in the media, on the web in many TV commercials. It is a program where you can settle your IRS debt for pennies on dollar.
You need to make sure you are using a credible tax firm to go ahead and present the offer in compromise to the Internal Revenue Service.
You need to beware of many of these advertisers that you see on TV because they are selling your information to third parties into the highest bidder. Many of these companies do not actually do the work. These companies are called lead generation companies.
When you chose a firm
When you choose a firm to reduce your IRS tax debt check the bios of that particular firm and make sure they have the credentials to back it up. Most professional firms will employ tax attorneys, CPAs, former IRS agents, enrolled agents. It is also essential you check the Better Business Bureau ratings.
Call us today for free initial tax consultation and we can walk you through the program.
You will also find an IRS pre-qualifier tool on our website so you can analyze your own case.
Reduce your IRS Debt
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship.
The Internal Revenue Service will consider your unique and individual set of facts and circumstances such as:
- Ability to pay;
- Income;
- Expenses; and
- Asset equity.
Approved offers in compromise represents the most the IRS can and will expect to collect within a reasonable period of time. Remember the IRS statutory period of time to collect back tax debt is 10 years.
Explore all other payment options before submitting an offer in compromise. The Internal Revenue Service will make sure you do not have the ability to borrow money from a third party before accepting your offer.
The Offer in Compromise program is not for everyone.
If you hire a tax professional to help you file an offer, be sure to check his or her qualifications. Make sure the tax professional has many years of professional tax experience and is well-qualified to attempt to reduce your IRS tax debt. There are many fly by nights in this industry.
Make sure you are eligible for Reducing your Tax Debt
Before IRS can/will consider your offer in compromise, you must be current with all filing and payment requirements.
You are not eligible if you are in an open bankruptcy proceeding.
The Offer in Compromise has a Pre-Qualifier tool to confirm your eligibility. You can find this on our website. It lets you enter your own numbers and figures and will let you know exactly what your offer has to be before you send it in.
Do not spend any money with a professional tax firm in less you walk through the pre-qualifier tool.
Submit your offer in compromise to reduce your tax debt
You’ll find step-by-step instructions and all the forms for submitting an offer in the Offer in Compromise Booklet, Form 656-B (PDF)
Your completed offer package will include:
- Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms;
- Form 656(s) – individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656;
- $150 application fee (non-refundable); and
- Initial payment (non-refundable) for each Form 656.
Select a payment option to reduce your tax debt.
Your initial payment will vary based on your offer and the payment option you choose:
Lump Sum Cash Payments :
Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
Periodic Payment:
Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.
If you meet the Low Income Certification guidelines.
You do not have to send the application fee or the initial payment and you will not need to make monthly installments during the evaluation of your offer. See your application package for details.
Understand the process that will reduce your tax debt
While your offer in compromise is being evaluated:
1. Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);
2. A Notice of Federal Tax Lien may be filed;
3. Other collection activities are suspended;
4. The legal assessment and collection period is extended;
5. Make all required payments associated with your offer;
6. You are not required to make payments on an existing installment agreement; and
7. Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.
You can call us for a free initial tax consultation and speak directly to a true tax professional.
We have worked hundreds of offers in compromise through the years and we are one of the premier firms in the country for IRS tax debt reduction.
How to Reduce your IRS Tax Debt by Using Former IRS Settlement Agent