If you’ve been seeking tax debt relief, you may have been tempted to contact a “tax debt relief” company that you heard about on the radio, TV, or newspaper ad. They are pretty tempting with their promises of settling your tax debts for “penalties on the dollar” with “0% down.” Is it possible? Sure, but not likely. It’s more likely you’ll end up shelling out thousands of dollars to pay the tax resolution company and still be stuck with all your tax debt. These companies are luring taxpayers with promises of applying for an Offer in Compromise (OIC) with the IRS. However, most OICs are not accepted and it can be a painstakingly detailed, lengthy, and costly process. This is why “tax debt relief” companies companies love them – they can bait taxpayers with their promises, charge them significant fees to prepare one, and then place the blame on the IRS for not accepting it. There are many other options that can provide you tax debt relief if you do not qualify for an offer in compromise. We will help you determine which option is best for you.
If you are unable to pay all of your tax debts at once, you may qualify to set up a payment plan with the IRS. We can determine whether you qualify for a guaranteed or streamlined agreement, and if not we can negotiate an agreement to enter into a partial payment installment agreement or non-streamlined installment agreement.
Currently Not Collectible
For taxpayers who cannot repay their tax debt due to economic hardship, the IRS may agree to postpone further collection action for an indefinite period. If the IRS agrees, then you would be paced in a currently not collectible (CNC) status. The IRS should periodically determine whether you are still in CNC status, but I have seen clients in CNC status for many years without receiving any further notices from the IRS. CNC can be a great option for those who are undergoing temporary economic hardship.
Innocent Spouse Relief
Through innocent spouse relief, the IRS provides relief from additional tax owed if your spouse or former spouse failed to report income, reported income improperly, or claimed improper deductions or credits.
It is possible to abate penalties assessed by the IRS, whether due to an audit adjustment, late filing, or late payment. This offers at least some debt relief for clients.
Offer in Compromise & Bankruptcy
If paying your existing tax debts will cause significant financial difficulty, the IRS will settle your tax debt through an Offer in Compromise (OICs). The IRS wants to get the most it can in a reasonable amount of time, and if that means negotiating the debt they will. Many taxpayers will not qualify for OIC if their income is too high or have significant assets available, but we can help you determine whether you qualify and if it is a feasible option for you.