Benefits of a settlement with the IRS This can help you avoid costly repercussions, such as asset seizures and wage garnishments. In addition, you may be able to avoid interest penalties that would make your total tax liability much greater than the dollar amount you actually owe. Tax debt settlement is a legal agreement between you and the IRS to settle your tax debt for less than what you owe. It is also known as an offer of commitment.
This solution is designed for people who are unable to fully pay their tax obligations and are experiencing financial difficulties. It allows taxpayers to negotiate an agreement with the IRS to reduce their tax debt to a manageable level and pay it over time. Known as tax settlement firms, these entities claim that they can dramatically reduce or eliminate what the customer owes the IRS. You can request a reduction in the tax penalty by writing a letter to the IRS explaining your circumstances, requesting an in-person interview with a tax professional, or submitting IRS Form 843 to request a refund and a request for a reduction.
The number of customers who get satisfaction from tax settlement companies is negligible, and most are practically in financial poverty. A primary factor the IRS considers when evaluating whether a taxpayer will qualify for a tax settlement is their financial situation. If you breach or breach the tax settlement agreement in any way, you will no longer be considered in good standing. When the IRS or the state enters into a settlement agreement with you, you are protected from certain actions that are normally taken against those who owe tax debts.
Most tax settlement firms promise to send their experts to the IRS to negotiate on behalf of the client, where they will presumably be able to convince the agency to accept a much smaller amount, often a penny on the dollar. A tax relief company, such as Tax Defense Network, will have the experience and knowledge necessary to present you with many options before doing the legwork to get the resolution you need. In certain cases, the IRS will allow you to negotiate a tax settlement for less than the amount you owe, or you may be able to pay off the debt for an extended period. The vast majority of potential liquidating clients need to develop payment plans with the IRS that allow them to settle their tax balances over time and, at the same time, preserve their assets and their dignity.
If you can pay all of your tax obligations, but you request that a leniency measure be imposed on you in relation to the fines that have been imposed on you, the tax penalty reduction program can provide you with a solution. Instead, the IRS or the tax authority will offer to accept monthly payments of a certain amount until the tax debt is settled. The taxpayer will first need to determine what type of tax settlement to request and then submit the appropriate forms to the IRS for review. Before considering settling a tax debt, it's essential to consult a tax professional and understand all your options.
Depending on your circumstances, you may be able to wait for your tax obligations to stop being collectable under applicable tax law and have them deleted from your record. With diverse backgrounds, Clean Slate Tax's tax debt relief professionals have more than 25 years of experience and can resolve most state and IRS tax problems.