Are your unpaid back taxes overwhelming you? Are you looking for tax debt relief? If you don’t think you will ever be able to pay off your tax debt, you may be able to eliminate a large portion of your tax debt with an IRS Offer in Compromise.
With an Offer in Compromise, the IRS may agree to settle your tax debt for less than you owe.
There are three types of Offers the IRS will accept to settle a tax debt.
Doubt as to Collectibility
If you can show that you do not have the assets or the income to pay off the tax debt, the IRS will take what they can get, and write off the rest of your tax debt. Be warned, it is the IRS that determines how much you need to live each month, and what your assets are worth. But if you have no assets, and your income is not enough to meet the IRS’s definition of required living expenses, you have a good chance of having your offer in compromise accepted.
Doubt as to Liability
If can show that there is uncertainty as to whether or not you actually owe the taxes assesed, the IRS may be willing to settle for considerably less than the original assessment. If you believe the tax examiner interpreted the law incorrectly, or failed to consider all the evidence submitted, it may be worth requesting an offer in compromise to settle your tax debt.
Effective Tax Administration
Believe it or not, the IRS will reduce your tax debt if you can show that paying it would create an extreme hardship, or would be unfair under the circumstances. Once again, if you can sway the IRS to your point of view, it is possible to eliminate thousands of dollars in tax debt.
If you think that you might benefit from an Offer in Compromise, see the IRS website for more information, and for the forms required.