Proven Ways to Settle Your Tax Debt with the IRS

Over the past few years, the IRS has become increasingly stringent with its tax regulations. There have also been changes in tax legislation at both the state and federal level. As a result, individuals and business owners have found it hard to circumvent their tax problems, especially the outstanding debt.

The following strategies may help.

Installment payments

By issuing a Collection Information Statement, Form 433F, you can request the IRS for an installment payment plan. The IRS will review your application and write you a notification letter to explain the proposed payment terms. It may charge you up to $105 and allow you to make your payments within the five-years timeframe. You’ll also have to promise that you’d pay all of your future taxes on time and full.

Offer in Compromise (OIC)

The OIC is a formal agreement between the IRS and the taxpayer that settles your debt for a lesser amount than the one owed. Under the Internal Revenue Code, this tax resolution option applies to all forms of taxes, includes penalties and interests. This offer aims to give the taxpayer a ‘fresh start’ in a way that suits the interests of both the IRS and the taxpayer. Initially, the taxpayer is asked to propose a reasonable offer. The offer has to be based on what the IRS thinks your ability to pay is. 

However, this program isn’t for everyone, and there are eligibility criteria. For the IRS to consider your offer, you must be able to prove that you can neither pay the lump sum amount nor according to the installment agreement. You can also not apply if you’re in an open bankruptcy proceeding. You must provide important information about your current assets, liabilities, and projected future income to the IRS. The process usually takes up several months, and the number of accepted applications is very low.

Wage garnishments

At times, the IRS uses wage garnishments to coerce payments out of delinquent taxpayers. This includes both the principle tax amount and the cost of borrowing. The IRS sends an official notice to the taxpayers requiring them to pay a portion of their salary directly to the IRS. In this case, there’s no way you can stop the IRS from taking this amount from you. The only way out is to get in touch with an IRS negotiation agency to sort things out and convince the IRS to stop wage garnishments.

The agency will engage in several negotiating offers to the IRS, including tax lien revocations, penalty abatements, and revocations for wage garnishments. The agency tries to ensure that you get away with fewer impositions and represent your best interest in front of the IRS. 

Empire Tax Solutions helps you manage your tax payments with the least amount of hassle. Dealing with the IRS on your own is not easy at all. Get in touch with Empire Tax Solutions for the best tax debt relief services in the US.