I have been giving tax advice as the IRS-Hitman for quite some time.  And I have been directly helping those with tax debt for even longer.  But sometimes a tax situation has become so serious that you need professional muscle to help you with the IRS.  That’s where Tax Defense Network can give you the necessary expert help with settling your IRS debt.

Offer in Compromise

An Offer in Compromise is what people normally think of for IRS compromise and settlement of their tax debt.  An Offer in Compromise is where the IRS settles your debt for a lesser amount than the total owed.  The amount of the settlement is based on your income and equity in assets so there is no average IRS settlement amount.  There are very strict IRS tax settlement conditions.  If you plan on settling with the IRS through the Offer in Compromise program, you should read the article, “How to Get an Offer in Compromise: 6 Steps to Salvation”

Penalty Abatement

An Offer in Compromise isn’t the only way of settling a tax debt with the IRS.  It’s no secret that penalties and interest can make an IRS debt balloon into an unmanageable amount of money in a very short time. 

However you can get the IRS to settle the debt and waive the penalties if the tax debt happened because of a catastrophic event in your life that was beyond your control.  Some of the circumstances that can qualify you for penalty abatement are: death of a family member, serious health problems, bad financial advice, natural disaster, theft or embezzlement, divorce, unemployment for an extended period of time, living on a fixed income, drug or alcohol abuse. 

While Penalty Abatement won’t erase your debt it can reduce it by as much as 30%.

Currently non Collectible

While this isn’t a way for settling income tax with the IRS, it can temporarily stop the IRS from taking collection actions.  In certain circumstances where you are unable to work, have little or no income, are seriously ill, or have no assets of value, the IRS may classify you as “Currently non Collectible”.  You can only qualify for Currently non Collectible if your financial situation is grave, as in eating at McDonalds is a luxury for you.  The IRS will continue to monitor your situation to see if any changes occur.  If your financial situation improves than the IRS will reinstate the debt and begin taking collection action again so if you know you’ll be able to get back on your feet this “settlement” is only a stay of execution. 

Innocent Spouse Relief

Much like Currently non Collectible Innocent Spouse Relief isn’t so much a way to reduce you debt by settling your IRS debt, as it is a way to erase your tax debt.  If you’re in debt to the IRS because of something your ex-spouse did then you can make an IRS settlement request to have your debt wiped out. Of course there are conditions:

Again if you qualify for Innocent Spouse Relief settling your tax debt is no longer something you will have to worry about.