IRS has the responsibility to ensure that citizens pay their yearly taxes on time failing which the bureau has the authority to penalize and even imprison the defaulters. IRS tax debt relief is the process of debt reduction by enabling those who are under heavy tax debts. This does not mean that the tax defaulter is wiped clean of all his liabilities. It is just a means of helping the defaulter to pay all his debts in a convenient manner. IRS is forced to work out a solution with each tax payer to recover the pending amount from him based on the payer’s financial condition. In order to facilitate effective tax collection, IRS offers various tax relief programs to defaulted taxpayers. IRS offers these various tax relief programs to help defaulters in different ways and resolve their tax liabilities without having to resort to hard measures. Some of the common IRS tax relief programs are Offer in Compromise, Installment Agreement, and Currently not Collectible status.
IRS also offers income tax relief to payers affected by disasters. The law permits IRS to provide extended time to disaster affected tax payers to perform activities like filing returns and paying taxes when the original and extended due date falls within the disaster period.
There are many qualified and experienced attorneys who can liaison between the IRS and the tax payer to make the process of IRS tax debt relief easy. If you owe taxes or have any kind of tax problems, it is always advisable to go to an expert who can guide you through the system and negotiate with the IRS for the best deal.
Tax Settlement for Less
Offer in Compromise (OIC)
An offer in compromise allows the tax payer to pay less than the full tax debt amount; it is an agreement between the IRS and the tax payer. IRS will not agree for an OIC if they believe that the liability can be paid in full as a lump sum or through payment agreement. If the amount offered by the tax payer is greater than or equal to the RPC (reasonable collection potential), the IRS will not accept an OIC. RPC includes value that can be realized from the tax payers assets and future income.
Currently Not Collectible Status (CNC)
This means that the tax payer has no ability to pay his or her tax dues. IRS can declare a tax payer as “Currently Not Collectible” after they receive adequate evidence. Such evidence is usually obtained from the payer through the submission of Form 433-F, Collection Information Statement, to IRS.
Partial Payment Installment Agreement
Requesting to pay in installments is less time consuming than requesting for an OIC. Through this system, the tax payer can pay back his tax debt in regular monthly installments. Once the terms of the installment are fulfilled, the remaining debt is forgiven. Such partial-payment installments are a very easy way to get out of IRS tax debt.