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What you should know about Tax Settlement?
Tax-Settlement.net is committed to help people with IRS and State back tax troubles that arise from unpaid State and federal taxes, late filings, audits unfiled returns, and more.

Know your options and decide what is best for your individual situation.

We do not recommend that you try these methods on your own. There are many reputable tax attorneys and other tax professionals who specialize in tax debts. They have experience negotiating with the IRS, know the various IRS forms and can explain all of your options in detail.

Fill out our form to be connected with a professional today that can offer you a free consultation.
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Your Option

1. If you do not dispute your tax bill, and you can afford to do so, pay it in full. By paying the full amount as quickly as possible you can avoid future interest payments and penalties. The IRS does accept credit cards.

2. If you cannot afford to fully pay your back taxes, you can sign up for an installment agreement, which you will pay over time. This payment plan will include increased interest and penalties; however, it allows for smaller more manageable payments. The IRS will stop all other collection actions; however, you must remain current with your payment schedule and compliant with future tax obligations. If you owe less than $25,000, you can use the On line Payment Agreement (OPA) application. You can see if you qualify, apply for an installment agreement, and receive immediate notification of approval.

Reccomendations

  • If you are able, pay the tax debt in full
  • If needed, look into installment agreements
  • Look into performing an Offer in Compromise
  • Declaring your status as Currently Not Collectible can defer your taxes

3. What is an Offer in Compromise (OIC)? This is an agreement between qualified people and the IRS that allows a taxpayer to settle their tax debt for less than full payment. How do you qualify for an Offer in Compromise? If you have proven to the IRS that you are unable to pay your liability in full, or through other payment arrangements such as installments, the IRS will accept an Offer in Compromise. The IRS will be willing to work with you, but you must be honest with them on your ability to pay your debt. They are tough negotiators.

How to be considered for an Offer in Compromise?

  • You must pay the $150 application fee or submit a signed Form 656-A, which will waive this fee based on family unit size and income.
  • You cannot be in an open bankruptcy proceeding.
  • You also have to submit a lump-sum offer, a completed Form 656-A, or a periodic payment offer with the first installment or a signed Form 656-A.

Your offer will be considered if one of the following conditions are met:

  • (1) Doubt as to Collectivity. The taxpayer is not able to pay the amount in full by liquidating assets, or through current installment guidelines within the statutory period for collection. The taxpayer must submit the appropriate collection information statement with all supporting documents.
  • (2) Doubt as to Liability. Doubt that the assessed tax is correct. To submit a Doubt as to Liability OIC, use Form 656-L, which can be obtained by calling 1-800-829-1040, visiting your local IRS office, or the IRS website.
  • (3) Effective Tax Administration (ETA) The taxpayer acknowledges that the tax is correct, however an exceptional circumstance exists. To be eligible, the taxpayer would need to establish that paying the tax in full would create an economic hardship or payment would be unfair and inequitable. To submit an ETA offer, you must submit a collection information statement with all appropriate attachments and explain in writing why paying your tax debt would create an economic hardship, or how it would be unfair and inequitable.

In cases of the latter two, your offer must exceed the value of your assets in addition to what can realistically be expected to be collected from over a four year period. A tax settlement professional will be able to lead you on what a realistic offer will be. The number of offers accepted over the past several years is declining, so be prepared for a rough battle.

4. If you are unable to pay your back taxes, the IRS can declare your status as "Currently not Collectible" (CNC). This means that the IRS stops any collection efforts and sends a yearly statement with the amount of tax owed. If you are unable to pay within the ten (10) year statute of limitations, your tax debt will expire. However, if your financial situation improves, you will be taken off the CNC status, and the IRS will renew their efforts for payment.

We do not recommend that you try these methods on your own. There are many reputable tax attorneys and other tax professionals who specialize in tax debts. They have experience negotiating with the IRS, know the various IRS forms and can explain all of your options in detail. Fill out our form to be connected with a professional today that can offer you a free consultation.


 

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