Can I Settle Back Taxes For Less Than I Owe?
- May 25, 2019
- Posted by: asal
- Category: Tax Resolution
If you haven’t settled your back taxes, the IRS will eventually begin their collection process. For taxpayers who can’t pay their back taxes in one lump sum, they can usually enter an Installment Agreement. An Installment Agreement is a payment plan to pay your back taxes over time, typically five years. However, an Installment Agreement will often result in taxpayers paying more than they currently owe. Taxpayers end up paying more with Installment Agreements because of interest that’s charged every month. Before you attempt to settle back taxes, first make sure your tax filings are up to date. Next, hire a tax resolution professional. Working with a tax attorney can be hugely beneficial when attempting to settle back taxes. A tax attorney is the only professional who can represent you in court against the IRS. Every taxpayer can try to pay back taxes for less than they owe.
Partial Payment Installment Agreement
Taxpayers owing $10,000 or more may apply for a Partial Payment Installment Agreement. A PPIA is a newer IRS program wherein the IRS determines how much a taxpayer should pay each month. The IRS bases how much your monthly payments should be on a Collection Information Statement. The CIS shows the IRS your total assets, income, and liabilities. The IRS may tell you to sell equity in assets before entering a Partial Payment Installment Agreement. It is likely that the IRS won’t let you settle for less while holding onto significant assets. It’s beneficial to seek the help of a tax resolution professional when determining the acceptable monthly payment amount.
Offer In Compromise to Pay Less Than You Owe
Another way to settle back taxes for less than you owe is through an Offer in Compromise. The IRS rarely accepts an Offer in Compromise. However, if the IRS does accept an Offer in Compromise, you can end up paying much less than you owe. Platinum Tax Defenders have successfully saved their clients thousands in back tax payments. If you’re considering applying for an Offer in Compromise, call Platinum Tax Defenders today. An experienced tax attorney can make sure your application for an OIC is completed to get the best outcome. Recently, Platinum Tax Defenders successfully got their client’s tax debt lowered from over $140,000 to $100 through an OIC.
Requirements for An Offer in Compromise
To qualify for an Offer in Compromise, a taxpayer must meet one of the three following conditions.
- Doubt of Liability: Prove to the IRS that there is a doubt that the total amount owed is not correct.
- Effective Tax Administration – The taxpayer acknowledges that the tax is accurate and can most likely be collected. However, the taxpayer claims repayment of the total balance will result in extreme financial hardship.
- Doubt of Collecting Liability – Proving to the IRS that the chances of paying total back taxes amount carry a low probability.
Usually, when you submit an OIC to the IRS, you’ll also need to pay 20% of what you owe up front. Therefore, working with a tax resolution professional can ensure you get the best possible outcome when applying for an OIC. Contact Platinum Tax Defenders today to see if you qualify for an Offer in Compromise.
When you apply for a Penalty Abatement, the IRS removes all of the penalties charged on your back taxes. Penalties accumulate for each day past your payment due date. Penalty Abatement does not allow you to pay less than the principal back tax amount. A penalty abatement will reduce or eliminate penalties on your total balance. On average, penalties typically account for 15-25% of the entire back tax balance. Penalty abatement is usually much easier to obtain out of the tax relief options. A taxpayer may pursue penalty abatement if they feel they are liable for taxes but not responsible for penalties. Before applying for a Penalty Abatement, consult with a tax resolution professional. You want to have a reason that illustrates unforeseen events caused you not to comply. Common reasons that are acceptable by the IRS include divorce, family death, severe illness, and extended unemployment.
Settle Back Taxes With Tax Resolution Professionals
When trying to settle back taxes with the IRS, it’s recommended to consult a tax resolution firm. A tax relief firm will offer tax settlement services through the help of CPAs, enrolled agents, and tax attorneys. Tax resolution professionals guide clients as to what back tax settlement method is best to pursue. A tax relief expert can also increase the likeliness of IRS acceptance. Tax resolution experts make certain forms and procedures are completed and followed correctly. There are a few common ways to settle back taxes for less than you owe. Usually, if you don’t receive approval for back tax settlement options, it’s because you didn’t file your taxes first. You also may not get approved if you do not meet the requirements of that particular form of tax settlement. For that reason, it is imperative to consult a tax relief expert when attempting to settle back taxes.
Settle Back Taxes For Less Than You Owe By Calling Platinum Tax Defenders Today!
Hiring a tax relief specialist can get you a better deal when attempting to pay off back taxes. A tax relief specialist can also save you a lot of hassle and consequences when you owe back taxes. Tax attorneys can help you determine which repayment method is right for you. The tax resolution specialist can also negotiate with the IRS on your behalf and submit the necessary paperwork. Owing back tax debt can leave you in bad financial shape. The IRS only wants to get what money you owe them in back taxes. Often, they are willing to help you settle back taxes, but you have to know how to try. That’s where a tax relief services company comes in. When you hire a tax resolution professional, there are other methods you can use to avoid expensive back tax debt. Call Platinum Tax Defenders for a free consultation today.