IRS Tax Debt Forgiveness Options
Can IRS Debt Be Forgiven?
For most tax debts the answer is Yes, but in most cases, only a portion will be forgiven. The new balance due will be reduced to an amount that you can afford to pay based on calculations performed by the IRS.
Read on to learn what every taxpayer needs to know about the IRS debt forgiveness program.
The IRS is generally thought of as the bad guy but they are willing to work with individuals who are unable to pay their tax debt. Either through a tax debt forgiveness program or a payment plan.
We understand the stress involved and our tax specialists have good working relationships with the IRS to help you through the process.
Do I Qualify For Tax Debt Forgiveness?
Income, Expenses, Outcome, Tax Filing, Bankruptcy, and Past Tax Debt Forgiveness determine eligibility.
- Income – You will need to disclose all of your income, whether it comes from taxable sources (paycheck, 1099, etc.) non-taxable sources (disability, child support, etc.). Income is one of the factors the IRS uses to determine your ability to pay.
- Expenses – Most expense calculations are based on your local standards but with proper documentation you can get a higher expense deduction. A few expenses you will need to provide are monthly bills including mortgage / rent, car payments, food, clothing, as well other bills such as medical, school, childcare.
- Outcome – Based on your income and expenses, the IRS will establish an amount they think you can reasonably pay.
- Tax Filing – You must have filed all past tax years
- Bankruptcy – You can’t be in an open bankruptcy at the time of filing for the offer.
- Past Tax Debt Forgiveness – If you had previously applied and the IRS accepted an offer for debt forgiveness, there is a statute of limitations of 5 years where you will have to stay current on your taxes.
How Much Does the IRS Normally Settle For?
The IRS will normally settle for what it thinks you can reasonably pay based on calculations they perform.
To determine this, they take into account your physical assets that have cash value (bank accounts, home, car, etc.), your reported income, your monthly expenses (house payment, utilities, car payments, etc.), and any other asset that can be easily sold (stocks, bonds, crypto, etc.).
The average settlement on an Offer In Compromise is around $10,000 for high debt settlements and lower on debts that are below $30,000 or less.
Should I Hire Someone To Settle My IRS Tax Debt?
While it is possible to settle your debt with the IRS on your own, we highly recommend hiring a debt settlement specialist and at the very least speaking with a tax specialist first. Due to the complicated nature of the IRS there will most likely be things you overlooked and could end up paying significantly more than what they would have accepted.
Our tax specialists have a good working relationship with the IRS and also direct communication, which means we get results fast and at the best possible rates.
How To Get Help With IRS Tax Debt Forgiveness
The first step towards successful resolution is to acknowledge that your tax debt and IRS collection notices won’t go away on their own and to seek professional assistance. Our firm of tax professionals has helped thousands of individuals and businesses just like you stop forced collections and finally resolve their tax debt. Give us a call today to schedule a free consultation with one of our tax specialists.