How to Achieve IRS Tax Debt Settlement
There is an old saying that goes, "the only two things that are guaranteed in life are death and taxes." Everyone faces the former eventually, but there is something you can do about the latter. If you are having trouble paying your taxes, it is possible to achieve a tax debt settlement with the Internal Revenue Service. It is too difficult to attempt to do this by yourself, so consult a tax relief attorney. They are familiar with the intricate and complicated IRS tax regulations and codes, and they work with you to take advantage of them. Additionally, there are several companies that assist taxpayers by recommending the best method of settlement.
First: Offer in compromise
The offer in compromise program allows the IRS to agree to charge the taxpayer less than the amount they currently owe. The taxpayer pays what he or she can afford, and after that payment the debts are cleared and the taxpayer is once again in good standing with the IRS. Unfortunately, the qualifications for this program are very strict and requests are very often rejected.
Second: Penalty abatement
The IRS gives taxpayers a chance to dispute interests and penalties for many reasons. As the qualifications for this program are less stringent than an offer in compromise, qualifying taxpayers usually get their debts wiped clean.
Third: Partial payment installment
This option allows taxpayers to partially pay their debts over a specific period of time. While they end up paying less than under a full payment plan, they might have to sell assets to do so.
Fourth: Innocent spouse relief
If you have filed jointly with your spouse, you may qualify for this to relieve your spouse of debts that he or she does not owe.
Fifth: Bankruptcy
There are two types of bankruptcy: Chapter 7, which requires asset liquidation, and Chapter 13, which forgives debt and lets you keep your assets in exchange for a scheduled payment plan, with the funds taken from your income.