Tax Debt Attorneys – How to Settle with the IRS
There are different ways to deal with the Internal Revenue Service to settle a tax debt.
One of the critical aspects in settling with the Internal Revenue Service is to make sure that your case is permanently resolved.
The ways of permanently resolving your debt are either through a bankruptcy proceeding, the statute of limitations expiring or the settling of your case through an offer in compromise.
Hiring a solid tax debt attorney firm can assure that you can resolve your case for the lowest amount of money in the least amount of pain to the client. This article will only deal with the offer in compromise to relieve yourself of the IRS tax debt.
Tax Settlement
Experienced tax attorneys and tax firms can help assure that you will settle your tax debt with the Internal Revenue Service for the lowest dollar allowed by law. It also should be known that there are specific formulas that dictate the IRS tax settlement policy.
The Internal Revenue Service has a process which is called the offer in compromise.
Tax Debt Attorney Facts
- The Internal Revenue Service receives about 60,000 offers in compromise each year.
- About 38% of those offers are accepted by the Internal Revenue Service. The average settlement on a dollar is $.14.
- If you are going to file for tax debt relief with the Internal Revenue Service you need to be patient. The average wait time to settle your case with the IRS is between six months to a year.
The Offer in Compromise
Within the last two years the Internal Revenue Service has come out with a new program or initiative called the fresh start .
It has allowed taxpayers struggling with old tax debt to permanently deal with the Internal Revenue Service and completely eliminate their tax debt for pennies on the dollar.
Before taxpayers goes running off to settle their IRS debt the taxpayer must make sure that they are a suitable and qualified candidate for the offer in compromise program.
Warning
As a warning to taxpayers, searching the Internet for tax companies to do this work I would caution you to make sure you are giving your work to a professional tax company. Most Internet sites that you see do not use qualified tax professionals to deal with your IRS tax debt.
They use semi-qualified people were more interested in generating fees in settling your tax debt.
Before hiring a tax that firm check on the qualifications of the professional that we will be working your particular case. Ask that person many questions. You will get a good solid gut feeling on whether you should hire that person or that firm. You should also check on the BBB rating as well as asking for similar results on a case that is similar to yours.
Pre-Qualifier Tool for Tax Debt
To make sure that you do not fall victim for some of these companies, the Internal Revenue Service has now a pre-qualifier tool that you can use before you submit your offer in compromise to settle your tax debt with the IRS.
You will find that pre-qualifier tool right on our website. I would urge all taxpayers before paying a dime to any tax firm to walk themselves through this very simple process to make sure they are qualified for an IRS tax debt settlement called the offer in compromise.
What dollar amount is IRS looking for to settle
The Internal Revenue Service is interested in two main things things, your assets in your income.
IRS has specific formulas to deal with the taxpayer’s income and the liquidation of certain assets to come up with a fair settlement amount for the offer in compromise to settle a tax that.
We at fresh start tax llc will pre-qualify your offer in compromise and make sure that you are a quality candidate for the tax debt settlement call the offer of compromise.
Contact us today for free initial tax consultation and we walk you through this program.
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.
IRS mainly consider your unique set of facts and circumstances:
1. Ability to pay;
2. Income;
3. Expenses; and
4. Asset equity.
The IRS generally approve an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time.
Make sure you explore all other payment options before submitting an offer in compromise.
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 you are eligible for a Tax Debt Reduction
Before the IRS can consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding. Use the Offer in Compromise Pre-Qualifier on the fresh start tax llc to confirm your eligibility and prepare a preliminary proposal.
Submitting your offer to the IRS
Your completed offer package will include:
1. Form 433-A (OIC) (individuals) or
2. 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
3. Form 656;
4. $150 application fee (non-refundable); and
Initial payment (non-refundable) for each Form 656.
Select a payment option for the Tax Debt for the OIC
Your initial payment will vary based on your offer and the payment option you choose:
- Lump Sum Cash: 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 .
Understanding the Tax Debt process with the IRS
While your offer 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 may be suspended;
4. The legal assessment and collection period is extended from the normal 10 years;
5. Make all required payments associated with your offer;
6. You are not required to make payments on an existing installment agreement or payment agreement program; and
7. Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date. Just so you know this rarely happens.
Fresh Start Tax a professional tax firm that specializes in the resolution of IRS tax debt.
We are comprised of tax debt attorneys, CPAs, and former IRS agents and managers. Contact us today for free initial consultation and we will give you free tax advice whether it is worthwhile to file an offer in compromise for your tax debt to settle with the IRS.
Tax Debt Attorneys – How to Settle with the IRS