Can IRS lower my tax debt?

Historically, the IRS encountered people with financial hardship due to unpaid taxes. If these people were required to pay back personal income tax, the Internal Revenue Service decided that they and their families could not afford the fundamental necessities. As a result of the fact that poverty is a relative term and is determined by a person’s actual income in addition to the number of people who depend on that income, the Internal Revenue Service (IRS) developed tax rules to assist people in getting out of debt. The Internal Revenue Service (IRS) provides eligible taxpayers with the “Fresh Start” program. Ideal Tax goes more into depth with taxpayer programs such as the IRS forgiveness program.

Getting a payment plan with the IRS

If you require additional time to pay your taxes, the IRS may be willing to work with you to establish a payment plan. Make payments on your back taxes, interest, and penalties using a payment plan.

Both short- and long-term payment agreements can be made with the Internal Revenue Service. On the other hand, activities supported by the IRS do not result in tax reductions. Through negotiation with the Internal Revenue Service (IRS), you may be able to avoid or decrease interest and penalty fines.

Qualifying for an offer in compromise

You can negotiate a “compromise offer” to reduce the money you owe in back taxes. You might pay less to settle your tax obligation with the IRS if you do it this way. This option may be provided by the Internal Revenue Service (IRS) if you cannot pay your taxes or if doing so would cause severe financial hardship.

Compared to a compromise payment plan, an offer in compromise is more difficult for the IRS to approve. The IRS complies with fifty percent of all requests. Verify your options before making a decision.

Your assets, as well as your income and spending patterns, play a role in determining whether or not the IRS will accept a compromise offer. In most cases, the IRS will urge you to enter a payment agreement rather than relieve part of your tax debt.

What to do when the IRS accepts your offer

If you want to pay the balance in fewer than five installments, your initial payment must be 20% of the total. Your first payment must be the amount due each month (if paying in six or more monthly installments).

Your offer of a compromise may be discussed further. The public inspection files on offers in compromise maintained by the IRS contain the taxpayer’s name, city, state, and ZIP code in addition to the amount owed and the terms.

– Your property will continue to have a federal tax lien placed on it by the IRS until the debt is paid in full.

– If the IRS refuses your offer, you have thirty days to file an appeal.

Why should you file your back taxes?

You will not be required to pay the IRS to handle it. This is what’s meant by the term “substitute return.” IRS data are the basis for your tax return and your tax bill. It may appear helpful, but it generates stress and discontent in practice. The Internal Revenue Service (IRS) frequently understates your tax liability because it cannot determine whether you are entitled to tax credits or deductions.

Set up a tax debt payment plan. The penalty for filing late tax returns and making late tax payments vary. Remember that you should still file your tax return even if you cannot pay the amount. To assist you in reducing the financial strain caused by your outstanding tax liability, the Internal Revenue Service (IRS) provides various payment options.

Pay your taxes in installments. There are several types of penalties for late tax returns and payments. You still need to file your return if you can’t pay your taxes. There are several forms available from the IRS.

The government might owe you money. You must submit your tax return to receive a refund. The Internal Revenue Service believes that $1.5 billion in tax refunds for 2018 were not claimed. Hurry! After the tax return is due, you have up to three years to file for a refund.

Avoid having problems with the loan application. Your most recent tax returns may be requested for a mortgage or financing.

Getting help from tax professionals

Tax relief organizations typically assist people who are having issues with their taxes. Some could be helpful if you need assistance with the documents or don’t understand how the process works. The tax professionals at Ideal Tax will be more than happy to offer you the first free consultation to help you resolve your tax debt.

What happens if the IRS does not accept your offers in compromise?

If your application for tax relief is denied or delayed by a tax relief provider, you will be required to pay the IRS for any back taxes, interest, and penalties.

Tax relief firms could need you to pay them a part of your total tax bill upfront. The expenditures associated with the compromise offer made by the IRS may surpass the tax savings (and it might not be refundable if the IRS rejects your request).

Be careful when selecting a tax consultancy company.

The reality is that most people do not qualify for the programs these con artists offer, that companies do not settle the tax bill and that they typically do not file the required paperwork with the IRS to participate in the programs outlined. Scam artists take advantage of people’s desire for tax breaks. Some businesses refuse to repay clients, adding to their financial commitments.”

Each organization that provides tax relief will examine your tax burden, assist you in establishing a payment plan, and determine whether or not you qualify for an offer in compromise for a fee. On the other hand, it’s possible to complete these jobs at no charge:

In a nutshell

Given that there is no certainty of approval, Ideal Tax can offer their insight to assist you in deciding whether or not to pursue this option. Remember that the IRS’s ultimate purpose is to obtain as much money as possible from you, even if it appears they are accommodating. A tax professional knows what is possible and has extensive experience dealing with the IRS. Moreover, they can assist you in determining if you qualify for an OIC, helping you find the optimal outcome for your debt.

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