Back Taxes – Hardship, Payments or Settle, is that not the Question 1-866-700-1040
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We have over 60 years of working directly for the Internal Revenue Service in almost every IRS position that’s possible.
We know all the tax options and tax strategies and how to deal with IRS back tax issues. We are experts in placing taxpayers into hardships, payment agreements or settling tax debt that is called the offer in compromise.
If you owe back taxes to the Internal Revenue Service they will close your case in one of three ways.
IRS can declare you to be a current tax hardship and place you in a currently not collectible status, the Internal Revenue Service may determine that you have the ability to make monthly installment payments or the Internal Revenue Service may let you know that you can settle your case and recommend that you file an offer in compromise.
IRS Considerations to be made on Back Taxes
In addition to the basic living expenses, other factors to consider that have impact upon the taxpayers financial condition include:
a. The taxpayers age and employment status,
b. Number, age, and health of the taxpayers dependents,
c. Cost of living in the area the taxpayer resides, and
d. Any extraordinary circumstances such as special education expenses or natural disaster.
e. Medical situations that have effected the life of the taxpayer or others in his family.
f. The education of the taxpayer is sometimes considered as well.
g. This list is not all-inclusive.
Other factors may be considered in making an economic hardship determination.
The question you need to ask, which of the three categories fit me the best?
Your financial statement will determine which category you will be placed in by the Internal Revenue Service.
The Internal Revenue Service uses form 433-F to make that determination and you can find that form on our website if you go to the homepage and click on IRS forms.
When you complete the IRS financial statement you will have to provide IRS all the documentation that goes with it.
You will also need to provide IRS a copy of your last 3 to 6 month bank statements copy, a copy of your last pay stub, and all your monthly bills and receipts. Once IRS has that current financial statement it will be ready to place you in one of three categories.
You should know that if you do not agree with the IRS position on the placement of a closing category that you have the formal right to appeal.
The IRS Tax Hardship
If the Internal Revenue Service reviews your financial statement and find out that your expenses exceed your income and you fall within the national standards the Internal Revenue Service will place you into a non-collectible status.
That non-collectible status usually last for a period of two or three years until the taxpayer adjusted gross income increases. It should be known that penalties and interest will continue to run.
The IRS Payment or Installment agreement
If the Internal Revenue Service determines that you have more income than allowable necessary living expenses the IRS will ask you to make a monthly installment payment to them.
These monthly installments will be made on a monthly basis and IRS will expect these payments to be sent to them on a timely basis. If you default on your monthly payment IRS will issue to you a notice of bank levy, a notice of wage levy, and the filing of a federal tax lien if applicable.
The IRS tax settlement- The new fresh start program by the IRS
The Internal Revenue Service tax debt settlement is called the offer in compromise and is a much more time-consuming process.
The average offer takes approximately 9 months from start to finish.
Over 58,000 offers are submitted every year into the Internal Revenue Service and about 18,000 offers are submitted mostly those that are accepted are with or by professional tax firm.
Being a former IRS agent and teaching instructor of the IRS offer and compromise a taxpayer has a far greater chance of having their offer accepted if prepared by a professional tax firm who knows what they’re doing and has worked a number of offers and compromises or tax debt settlements.
You can find on our website the pre-qualifier offer tool that will let you know ahead of time whether you were to offer in compromise candidate.
Make sure you are pre-qualified before giving your money or submitting an offer in compromise to the Internal Revenue Service
Under the current Fresh Start initiative the IRS has incorporated its Streamlined Offer in Compromise process into the overall investigation of offers and has added flexibility to the financial analysis used in evaluating offers.
The Streamlined Offer in Compromise process includes:
a. Fewer requests for additional financial information,
b. If necessary, requests for additional information by phone, not by mail,
c. Greater flexibility when considering your ability to pay.
The changes to financial analysis add more flexibility to the OIC process including:
