How to Settle with the IRS

Settling with the IRS, while still difficult, has been made a little easier with the “Fresh Start Initiative”. The Fresh Start Initiative was originally rolled out in 2011. Some of its major benefits are: it allows more individuals to qualify for a repayment program using the Streamline Installment Agreement; it allows payment plans for up to 6 years; it allows raising the delinquent amount from $5,000 to $10,000 before a tax lien is issued (in most cases), and it qualifies more individuals for the Offer In Compromise program.

In general the IRS wants you to pay back as much of your delinquent tax debt as possible and as quickly as possible. However, you have rights and laws to protect how much the IRS can request from you. The IRS cannot require you to pay back more than what you can afford.  You have to be able to pay for the necessities of life: food, clothes, medicine, rent or mortgage, electricity, etc. The IRS will require (in most cases) that you prove how much you are able to pay back. You prove this by providing information about your income, assets and expenses. The amount of money that you are able to payback (income – expenses) is known as your disposable income. Learn more about how much you need to pay back.

 

Offer In Compromise

If you can prove through your income, asset and expense analysis that you don’t have the money to pay back the IRS in full, you may qualify for an Offer In Compromise, a program the IRS has created to allow delinquent taxpayer’s the ability to resolve their tax debt for a fraction of what is owed. (Often the taxpayer hears only that one sentence from the hundreds of tax resolution firms advertising on the radio, TV, and internet.) While this is a true statement, the next statement, which is left out of many sales pitches, is that you must qualify for this program. The percentage of individuals qualifying for this program has increased with the Fresh Start Initiative, but still just under 75% of all submitted Offer In Compromises are declined. To qualify for this program you must prove that you are unable, now and in the future, to repay your delinquent tax debt in full and that both you and the IRS will be better off if your Offer In Compromise is approved. The IRS will analyze your current and potential employment, income, assets, and expenses. If your income or assets, now or in the foreseeable future, will allow you to pay back your tax debt, more than likely you will be declined for this program. If approved for this program, it is often your best chance to pay back the least amount possible.

 

Installment Agreement

For the rest of us, there is the Installment Agreement program consisting of the Streamline Installment Agreement, Guaranteed Installment Agreement, the Partial Installment Agreement and the General Installment Agreement.

The streamlined and guaranteed installment agreements require that you are able to pay back your debt in full and you owe a certain amount or less in taxes but these programs will require less paperwork and scrutiny from the IRS.

Guaranteed Installment Agreement
        Owe $10,000 or less in taxes (exclusive of penalties and interest)

        Pay back full amount in 36 months or less

Streamlined Installment Agreement

        Owe $50,000 or less (Increased from $25k)
        Pay back in 72 months or less (Increased form 60 months)

The Partial Installment Agreement allows you to pay back a portion of your delinquent tax debt based on your disposable income. The IRS can require you pay your disposable income for up to 72 months and then the remaining amount owed, in many cases, cannot be collected.  

This is meant as an example only. You will need to apply the IRS repayment formulas to your specific situation to determine how much you will be required to pay back.

And the General Installment Agreement is for anyone who is able to pay back the full amount in 72 months and does not fit into either the streamlined or guaranteed programs.

 

In Conclusion

If you want more information on how to resolve your tax debt without having to pay thousands to in industry expert, then our website is the place for you and is full of information you can use. We offer at www.TheTaxSettlementGroup.com a simple and friendly Resolution Guide consisting of 64 pages full of insider secrets, laws and concepts so that you can resolve your tax debts for the least amount possible. After you review our quick Resolution Guide, we then offer you a step-by step online program for completing the required forms needed to resolve your delinquent tax debt for the least amount. Our program helps you put this whole mess behind you in just a matter of a few hours. We even offer a simple-to-use Pre-Qualifier to make sure our program can help you. One of our program gurus (a real human) will review your specific situation and let you know if our program is a good fit for your circumstances.

Have questions? Call us anytime at 877-801-9166.