When you owe a large debt to the IRS and you are being hounded with collection notices, the stress can be unbearable. In most cases, people who owe back taxes genuinely want to get rid of the debt, but they simply cannot find a way to make it happen. Money is already tight with high living expenses and every spare penny goes to just keeping the lights on. So how can you possibly pay off a massive tax bill when you don’t have the money to spare?
The IRS knows that some Americans just cannot pay their tax bills. In fact, an estimated $600 billion in taxes go unpaid every year, creating a large gap for the IRS to chase down through aggressive collections tactics. In response to this growing problem, the IRS began to offer a solution called the “offer in compromise”. This is essentially a settlement that the taxpayer negotiates with the IRS to pay off tax debt at a reduced amount. In many cases, an offer in compromise settlement can save you thousands of dollars in the overall amount of money you have to pay on your outstanding IRS debt.
While the offer in compromise can be a lifeline for many struggling Americans, it is also difficult to obtain without professional help. Before the IRS will even consider granting you a settlement, you will need to provide detailed financial reports, itemized expenses, and some form of proof that you cannot realistically pay your tax burden in full.
In order to have the best chance of getting an offer in compromise, you will need help from a tax attorney that is experienced in reaching settlements with the IRS. Your attorney will represent you through the grueling process, which oftentimes takes over a year before a settlement is finalized. Once the IRS does accept an offer in compromise, you will have to act quickly to pay the reduced tax debt within a given time frame. If you don’t make the payment on time, you forfeit your settlement agreement and you will be right back in the position where you started.
Many people assume that an offer in compromise will be a quick way to get out of hot water with the IRS, but you should enter into the process with the understanding that the IRS could deny you a settlement. In order to understand if you are even a good candidate for a potential tax debt reduction, you will need to sit down with a qualified tax attorney and discuss your case.
A tax attorney will ask you to bring in all the notices you have received from the IRS so far along with your recent tax returns and copies of all of your financial documents. After reviewing the information, the attorney will give you an honest look at whether you might be a candidate to petition the IRS for a settlement. If you are struggling under the hefty weight of back taxes and unpaid tax returns, take action today and call a tax attorney to explore your options.