IRS Debt Settlement: Is Offer in Compromise the Only Choice?

Your IRS Debt Settlement Options

irs debt settlement factsMost people who are looking for an IRS debt settlement would pay the full debt amount if they had the money. For those hit by hard times, a large tax debt is intimidating. Trying for an Offer in Compromise may seem like a quick answer, but it may not be the best solution for you. This page will help you decide if the Offer in Compromise or partial payment plan is the better IRS debt settlement option.

IRS Debt Settlement with an Offer in Compromise

It is extremely rare that someone successfully gets the IRS debt settlement they were hoping for, if they are able to settle the debt at all. Filing for an Offer in Compromise is an incredibly risky gamble for a reward that may not be in your best interest. Read the following facts about the Offer in Compromise before you decide to file for this IRS debt settlement.

  • You must disclose all of your personal and business finances.
  • Retirement plans and college funds are considered assets that can pay a tax debt.
  • The IRS can take up to two years to accept or reject your offer.
  • During the review, the countdown to your debt's expiration is paused.
  • A non-refundable $150 application fee and 20% initial payment must go with your offer.
  • If your offer is accepted, you must file and pay all taxes on time for five years.
  • If your offer is accepted, you will have a short time period to pay the settled debt.
  • If your offer is rejected, the IRS will know exactly where it can successfully levy you.

If you still wish to file for an Offer in Compromise, talk to a reputable tax debt professional first. Getting an IRS debt settlement of any kind is based on calculations, not negotiation. A professional will be able to tell you if you have any chance of getting an Offer in Compromise accepted. Also, filling out the Offer in Compromise booklet incorrectly could lead to an even worse position with the IRS. Hiring a professional to do this will bring about the best possible outcome for you.

IRS Debt Settlement with a Partial Payment Plan

If there is absolutely no way for you to pay your tax debt in full before it expires, you can enter into what is called a partial payment plan to get an IRS debt settlement. It is a voluntary disclosure installment agreement. To do this, you will have to disclose your finances to prove that you can only afford to send the IRS a certain amount per month. Once your debt expires, according to its statute of limitations, you will no longer have to send payments on that debt again.

This is a better IRS debt settlement option for those who cannot send a large lump sum to the IRS. Depending on your finances and how many years are left in your statute of limitations, you could wind up saving thousands of dollars without the risk of an Offer in Compromise. There is a set-up fee of $105, but low-income taxpayers only need to pay $43. Again, it is best for you to talk to a reputable tax debt professional about this IRS debt settlement to see if you qualify.

If you want to know what IRS debt settlement would work best for you, consult a professional. Call now or fill out the form below for a free tax debt consultation on the many IRS debt settlement options out there! We'll only connect you with a tax debt relief company holding at least a B rating with the Better Business Bureau.

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