What is IRS Debt Settlement and How it Works
By: Matt Robinson | Posted: 29th December 2010
Understanding tax debt settlement is essential if you owe money to the IRS. With a tax settlement, you are able to pay settle your liability for less than what you owe. The IRS offers several methods for taxpayers who are interested in settling their balance due. Of course, you are not going to qualify for every option. The IRS considers many factors, including your financial situation. It goes without saying that they want you to pay your taxes in full. That being said, they make exceptions under particular circumstances.
The IRS often times allows a taxpayer to negotiate a settlement for less than what is owed, or opt for another method of paying their tax. In either situation, the taxpayer must meet the requirements set forth by the IRS. In other words, you cannot simply decide that you are going to settle your taxes with the IRS – you have to meet the qualifications and they must agree to it.
Above all else, you have to decide which type of tax settlement makes the most sense. From there, you are required to submit the proper forms to the IRS so that your situation can be reviewed. If you are worried about filling out these forms on your own, you can hire a tax
professional to assist you. Once a settlement is reached, your account is considered to be in good standing for the time being. This can change quickly, though, if you don’t live up to your end of the bargain.
If you want to settle taxes for less you will eventually have to decide on a strategy for doing so. Your options include offer in compromise, penalty abatement, and a partial payment installment agreement. With each of these options you are able to pay less than the total amount owed. Each one of these options calls for a different set of requirements. For example, it is much easier to qualify for penalty abatement than an offer in compromise. The IRS only accepts roughly 10 to 15 percent of the offers they receive.
It can be difficult to fully understand IRS debt settlement and how it works. Not only do you have to consider the many options, but you must also realize that the IRS does not have to let you settle for less. If you are confused of where to start or which steps to take, it makes sense to hire a tax professional. By doing so, you can ask questions while also having somebody who can communicate on your behalf with the IRS. This can greatly increase your chance of settling your tax debt.
IRS debt settlement gives you the chance to pay less than what you actually owe. The way the process works depends on the type of settlement that you are interested in.
If you owe money to the IRS it makes sense to consider debt settlement. With so many options for doing so, there is a good chance that one of them will work for you.
Find out more information on IRS debt settlement at TaxDebtHelp.com and find the solution that works best for your personal financial situation.This article is free for republishing
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Tags: money, circumstances, exceptions, bargain, irs, financial situation, debt settlement, taxpayers, installment agreement, offer in compromise, tax debt, tax settlement