IRS Forgiveness of Income Tax Debt -- Settle with the IRS for Less -- Offer in Compromise -- IRS Settlements
FLAT FEE TAX SERVICE, INC.
IRS TAX DEBT FORGIVENESS
What is IRS Tax Debt Forgiveness?
The IRS is a very powerful collection agency who has the responsibility for collecting Federal Income Tax. The IRS is not a "consumer protection agency" and it isn't their responsibility to fix your back tax problems. Your back tax problems are your responsibility and the IRS will only act when presented with information provided by the indebted taxpayer.
The IRS does not "forgive tax debt." A taxpayer's back tax debt can be reduced and settled through various methods but it is never "forgiven." Here are the various ways that a taxpayer can have their back tax debt reduced and or "forgiven:"
Penalty Abatement - The IRS will adjust the penalties and interest assessed to a taxpayer's back tax debt due to what is called "reasonable cause." The taxpayer needs to petition the IRS for a Penalty Abatement based on a reasonable cause. A reasonable cause for a taxpayer's IRS problem can be many things, including: loss of job, loss of income, health issues, death to a family member, forces of nature, bad tax advice, bad advice from the IRS, divorce, etc.
When you petition the IRS for a Penalty Abatement, you get only "1 bite at the apple." You get one (1) petition and that is it, so it had better be prepared right the first time. Most likely, an inexperienced taxpayer will not know what they are doing and they will fail. If you do a Penalty Abatement, be sure to have an experienced IRS tax professional prepare your Penalty Abatement petition.
File Your Delinquent Tax Returns - If you have tax returns that are unfiled and delinquent, you are being assessed penalties and interest that is quite frankly "ought of sight." Besides the enormous penalties and interest that are being assessed to your back tax debt because you have not filed your tax returns, you have no Rights. The IRS does not have to negotiate with you. The IRS can seize your paycheck, your Social Security, your bank account(s) and take your car or other assets that has value.
By filing your delinquent and unfiled tax returns, you will restore your rights and you it is possible to have those egregious non-filing penalties reversed out. This can mean an enormous savings from what the IRS has been trying to collect from you. Also, if you are compliant (all necessary taxes have been filed), you can then be eligible for other forms of tax debt reduction or "forgiveness."
Currently not Collectible - If you do not have the ability to pay the IRS anything, you may be placed in Collectible Status which is formally called, Currently not Collectible. Like anything else with the IRS, you will be required to file an application. For individuals the application is called a 433-A. For a business, the IRS application is called a 433-B. Both the 433-A and the 433-B IRS Forms are financial statements listing income, assets and expenses. If you or your business are struggling financially and show this on your 433-A or 433-B form, all IRS collection activity against you or your business will cease (stop). Your bank account(s) will be protected from IRS seizure. Your wages (paycheck) will be protected from an IRS wage levy (garnishment). Your Social Security will be free from an IRS levy. Now, understand this, your debt is not "forgiven," but you will not be making payments on your back tax debt.
Thew IRS will periodically check in with you and you, currently not collectible taxpayer, will be required to show the IRS that you are still unable to pay back your tax liability. The Statute of Limitations will continue to run out while you are in uncollectible status. In effect, you may never pay the IRS "one thin dime" toward your past due tax debt. The IRS will, most likely, file a Federal Tax Lien against you. If you have a refund coming, the IRS will seize it and apply the tax refund toward your back tax debt. That is a small price to pay when you consider that your back tax debt, which could be tens of thousands of dollars, will never be paid. Once again, being Currently not Collectible is not a "forgiveness" of your back tax debt but it is a significant IRS program that will reduce your tax liability.
Offer in Compromise (Fresh Start Initiative) - An IRS settlement of a tax debt is not "forgiveness." Remember, th IRS doesn't "forgive" debt. What the IRS will do is this: the IRS will settle for less than the amount owed. An IRS settlement (forgiveness of debt) is based on a very complicated formula. This settlement formula is based on a struggling taxpayer's income, their assets and what is called allowable expenses. It is similar to being declared Currently not Collectible except the taxpayer in this case can the IRS "something." What this "something" is will more than likely be beyond the comprehension of the ordinary taxpayer.
An "IRS forgiveness" through the Offer in Compromise program is based on three different reasons:
- Doubt as to Collectibility - This is when the IRS believes that it is highly unlikely that the entire amount of tax liability will ever be repaid within the Statute of Limitations. The struggling taxpayer has the ability to pay "something." The amount negotiated does not have to be paid in a lump sum. A struggling taxpayer can pay the IRS back in monthly installments.
- Doubt as to Liability - Approval for an IRS settlement under Doubt as to Liability is rarely granted. A taxpayer has to prove that the IRS made a mistake or error. Good luck with that one.
- Effective Tax Administration - When a taxpayer admits that the tax debt is valid and also has the assets to pay the delinquent tax debt, the IRS may accept a settlement from the taxpayer based on a "hardship." More than likely the only taxpayer that will have this form of "tax forgiveness" granted would be an elderly couple with limited income but have a home that has some equity. Once again, good luck with this one.
It comes down to this: the struggling taxpayers ability to pay the IRS against the IRS's ability to collect. Doubt as to Collectibility is the #1 reason why an Offer in Compromise is accepted. To be clear, a successful Offer in Compromise is not "forgiveness" of a tax liability. An Offer in Compromise is an agreed upon settlement of a delinquent tax liability.
What is Expected of a Taxpayer who has a Successful Offer in Compromise:
- The taxpayer's tax returns must be filed on time (April 15th) for a period of 5 years. You will be on "IRS tax probation." Failure to file your tax returns will result in reinstatement of the original tax debt plus additional penalties and interest.
- A taxpayer must pay any taxes due at the time of filing. Failure to do so will result in reinstatement of the original tax debt plus penalties and interest.
- The agreed upon monthly payments for the accepted Offer in Compromise must be paid timely. Once again, failure to do so will result in reinstatement of the original back tax debt plus additional penalties and interest.
DOES ANY OF THE ABOVE SEEM LIKE "FORGIVENESS" TO YOU?
As stated previously, the IRS does not "forgive" debt. The IRS must allow a Penalty Abatement when it is proven that a taxpayer had reasonable cause for their problem. The IRS must place a taxpayer in Currently not Collectible status when shown that the struggling taxpayer cannot pay anything toward their delinquent tax debt. The IRS must accept an IRS Settlement when shown that a struggling taxpayer can only pay the offered settlement.
The IRS will always look for ways to reject any settlement offer. The IRS will not "go quietly into that good night." The IRS will look to see if you failed to "dot an "i" or "cross a "t." When the IRS rejects an Offer in Compromise because the form has an error of some kind, the IRS calls this "unprocessable." The IRS will not give you a reason for the rejection. It's up to the struggling taxpayer to "figure it out."
IF YOU ARE LOOKING TO SETTLE WITH THE IRS,
HAVE AN EXPERIENCED IRS TAX ATTORNEY
HANDLE YOUR IRS "FORGIVENESS" PETITION
Getting a reduction in your back tax liability is, of course, a good thing. Getting the IRS to stop enforcement of their claim against a struggling taxpayer is a good thing. Getting the IRS to accept less that the full amount of a struggling taxpayer's tax debt is a good thing. But, never should it be called "forgiveness." There are "strings" involved with each IRS "forgiveness" scenario.
WHAT DOES IT COST FOR "IRS FORGIVENESS"
Full Service - Affordable IRS Income Tax Help - IRS Forgiveness Help
If you owe the IRS between $10K and $100K; pay only $1990 for complete IRS tax debt forgiveness help which includes: Prepare 3 tax returns, stopping an IRS Levy / IRS Wage Garnishment (release/removal) and an IRS Offer in Compromise or IRS Penalty Abatement.
- Pay an Initial Fee of $290.00.
- 10 Monthly Payments of $170.00.
- For a Total of $1990.00?
IF YOU CAN:
- YOU CAN HAVE YOUR IRS LEVY STOPPED IN ONE DAY.
- YOU CAN BE PLACED IN CURRENTLY NOT COLLECTIBLE STATUS IF ELIGIBLE.
- PETITION THE IRS FOR A PENALTY ABATEMENT.
- FILE YOUR IRS SETTLEMENT FOR IRS TAX DEBT FORGIVENESS THROUGH THE OFFER IN COMPROMISE PROGRAM.
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