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IRS Debt Forgiveness Program

IRS Offer in Compromise (OIC) Preparation Guide

IRS Offer in Compromise (OIC) Preparation Guide

By on Oct 28, 2019 in IRS Debt Forgiveness Program | 0 comments

Not everyone pays their taxes on time. Sometimes there are extenuating circumstances, such as losing your job or suffering a family emergency. Even so, the IRS has a reputation for recording who has failed to file a tax return, or who has recurring debt through the years and missed a payment. Consider how the historic gangster Al Capone was finally arrested for tax evasion and not for his other extensive crimes.  Contrary, to what you may see in movies or with murderous gangsters, the IRS will not toss you into jail at the sign of the first missed tax payment. There are applications you can fill out for extensions, installment agreements, or a means to settle an accumulated debt. An Offer In Compromise is one option to allow you to get a clean slate when you can pay your taxes but would suffer financial hardship. It also applies when you cannot clear an accumulated debt.  What Is The IRS Offer In Compromise? The OIC is a compromise that allows you to pay a smaller amount on your tax debt. An individual has to send an offer for an OIC that the IRS can either accept or reject. An incentive to use this is when paying your taxes will cause short-term stress and liability or when you cannot pay the full debt. First, you need to be eligible to submit an OIC. You must have filed all your tax returns, received a bill from the IRS, make required payments for the federal year and deposits for the quarter at which you make the offer. Factors such as age, income, and education level will also factor into the IRS deciding to qualify you or not. Lifestyle is probably the hugest factor since the IRS will look at your cost of living, the homes, and cars you own, and any hint of financial irresponsibility.  As you can imagine, you need an influx of cash to get started on paying less debt to the IRS. You also need to prove that you can pay the money, but doing so would be deleterious in the long run. This is called effective tax administration.  Collectibility and liability are two other factors that can allow you...

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Getting Help With State and Federal Tax Debt

Getting Help With State and Federal Tax Debt

By on May 17, 2018 in Debt Relief, IRS Debt Forgiveness Program, Tax Debt | 0 comments

More than 18 million Americans owe money to the IRS.  If you owe federal or state tax debt, making a plan for paying off this debt as soon as possible is extremely important.  There are many reasons taxpayers have trouble paying their tax debt and fall behind.  Some of the most common reasons include being too busy to complete the paperwork, experiencing a major life event that prevents them from filing, or simply not having the resources to pay the debt. No matter the reason is for getting behind, there are many resources to help you get back on track.   The Internal Revenue Service (IRS) offers several programs that you may be able to take advantage of that can help you take control of your outstanding tax debt once and for all.   Installment agreement:  An installment agreement allows you to pay your tax debt off over time, rather than all at once. Think of an installment agreement like a credit card. You make a monthly payment to the IRS or the state each month. This payment includes your tax debt plus and penalties and interest and you can generally have up to 5 years to pay down your debt. Offer in Compromise: If you have a financial hardship that makes you unable to pay your tax debt in full, you may qualify for an Offer in Compromise. This program allows you to settle your tax debt for less than you owe. You have to prove to the IRS that you are actually unable to pay, so be prepared to show detailed financial documentation. Not currently collectible status:  Another option that the IRS offers is where the IRS actually agrees not to collect your tax debt for a period of time (usually 1 year).  Getting the status “not currently collectible” means that according to the IRS, you have no ability to pay your taxes. This classification will stop a levy, lien or termination or denial of an installment agreement.   Put Your Tax Debt Behind You   As you decide what path to pursue, you should be aware that if you continue to let your federal and/or state tax debt add up, you will have to pay much...

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IRS Debt Forgiveness Program: Do You Qualify?

IRS Debt Forgiveness Program: Do You Qualify?

By on Nov 13, 2017 in Debt Relief, IRS, IRS Debt Forgiveness Program |

Do you have tax debt that you are concerned you will never be able to pay?  Millions of Americans owe back taxes to the Internal Revenue Service (IRS) and worry that once they receive a letter from the them, they’re just a day away from financial disaster. You should be aware that in the last several years, the IRS has actually implemented programs that make it easier to request some of your tax debt to be forgiven.  Below is some basic information that can help you determine if you qualify for the IRS Debt Forgiveness Program.  One of the IRS’ goals with this effort is to improve the negative perception of the agency and provide true assistance to taxpayers, rather than appearing to simply be going after their money. Details on the IRS Debt Forgiveness Program Your financial situation is the most important factor that the IRS considers when determining whether you qualify for the Debt Forgiveness Program. The IRS’ Fresh Start Initiative makes it easier for taxpayers to qualify for an Offer in Compromise, a payment plan that allows taxpayers to settle their debt with the IRS for less than what they owe at an amount they may be able to afford. One of the biggest changes to this program is that you no longer have to disclose extensive and cumbersome financial information for review. To qualify for an Offer In Compromise under the new IRS guidelines, you should be aware that you cannot have an open personal or business bankruptcy petition, you must have filed all required tax forms and all tax payments for the current year must be paid and, if you are a business owner with employees, you must have made current quarterly tax payments. The Fresh Start Program also provides relief for tax penalties, lien release, and installment agreements, that allows taxpayers to pay their debt over time, rather than in one lump sum. Are You Eligible? The Fresh Start Program is a genuine attempt by the IRS to provide relief to taxpayers who owe significant debt to the IRS and who may not be able to pay it easily.  Applying for an Offer in Compromise or an Installment Agreement has become easier, with...

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