An IRS tax settlement allows a taxpayer to settle a debt for less than what they owe. In addition, some settlement options focus on small, manageable payments. When deciding to issue an agreement, the IRS considers extenuating circumstances, the taxpayer's ability to pay what is due, and applicable tax regulations. A tax agreement is an agreement between a taxpayer and the IRS or state tax authority to settle a tax debt for less than the amount due.
It's a highly desirable resolution strategy because of the immediate savings effect it provides. Tax relief companies regularly use the Internet, radio, and television to advertise their services to struggling taxpayers. Basically, tax relief companies work by negotiating with the IRS on your behalf to get a fee. That fee can reach thousands of dollars, with no guarantee that they will be more successful than you would be if you negotiated with the IRS on your own.
The most common resolution strategy for an IRS tax settlement is through the offer in compromise program. Tax relief can allow you to divide your debt into payments or reduce the amount of taxes you pay to the government. Having a successful tax settlement strategy will end up saving you money because you won't pay your tax debt in full. The key to keeping any of your tax settlement strategies up to date is to keep up with your current requirements for filing, paying, and filing tax returns.
It's always best to hire a licensed tax professional to help you choose the tax settlement options that may apply to you. If this seems too complex for you to solve on your own or you just want to ensure that you have the best chance of success, you can also call a tax relief company or a tax attorney. No, the tax relief won't wipe out your tax bill and could cost you more in the long run, but it could make paying what you owe the federal government much more manageable. And, if you think you may be a victim of tax identity fraud, see What to do if you're a victim of tax identity theft.
Tax relief actually involves setting up a payment plan or negotiating an agreement with the IRS; it's not about erasing your tax liability. Omni's licensed tax professionals are experts in offering you the best tax resolution strategies, which could include a tax settlement strategy.