If you’ve ever received a notice from the IRS, you know the feeling that comes with it. An even worse feeling is when the IRS seemingly ignores your response or even refuses to acknowledge your questions or claims. There are deadlines where issues must be resolved to avoid further IRS penalties and the poor lines of communication with the IRS do not help in the tax relief of your issues. If the IRS ignores your attempts to correct the mistakes, it is time to contact a Tax Settlement Attorney.
If you are unable to pay your federal tax debt, the IRS offers a way to get a new start called an Offer in Compromise. The Streamline Offer in Compromise program is straightforward with specific criteria and open lines of communication. This tax settlement program is can be manageable for any taxpayer but it really isn't recommended. Those struggling taxpayers who do not qualify for the Streamline Offer in Compromise program should consider hiring a tax settlement attorney to handle their IRS settlement.
An IRS Offer in Compromise provides tax relief for people who are either unable to pay their tax debt to insufficient assets or for whom payment would be unfair and inequitable. As part of the Offer in Compromise program, the IRS offers two options for repaying your Offer in Compromise settlement. The first settlement option requires payments of set amounts to be completed within five months from the date of submission. The second option requires monthly installment payments of your set amount until the debt is paid in full.
Tax Settlement Attorneys: Payment Option 1:
Payment Option 1 can be found in section five of the offer in compromise form. In this settlement offer, you are expected to make a first payment that is 20 percent of your total offer. So, if owe $10,000 in tax debt and are offering the government $1,000 as your offer in compromise, then your down payment would be $200, leaving a balance of $800. You can then divide the rest of the money owed into as many as 5 additional payments, specifying the amount of each payment and the date that the IRS will receive it. As a general rule, it is advisable to select dates no further than five months from the date of submission for this option.
Tax Settlement Attorneys: Payment Option 2
Payment Option 2 can be found in section five directly under Payment Option 1 on the Offer in Compromise form. With the second option, you set a monthly payment amount, the first payment of which is received with the application. The amount should be in accordance with your financial situation. So, if your settlement offer is again $1,000, but you can only afford to pay $50 each month, then you will pay the IRS the $50 for 20 months. With this second option, failure to pay for even one month results in an automatic revocation of your Offer in Compromise settlement. Additionally, while you are making payments on your settlement offer, any tax returns from your filings are applied directly to the repayment of your tax debt.
With both payment options, a down payment of $186 is required for the application. This down payment is non-refundable and will be applied as a credit toward the debt that you owe. If you cannot afford the down payment, your Tax Settlement Attorney can petition the IRS to waive your down payment should you meet the low-income requirements found in Section 4 labeled “Low Income Certification.” Under this document, those with a monthly income lower than that listed for the size of your household do not have to pay the $186 filing fee. If you doing your own settlement offer, make certain that you check the box in Section 4.