According to the federal law, the IRS or the Internal Revenue System has the power to agree to settlement over the tax debts to be paid. Just like the debt consolidation programs, there are various tax debt relief programs which may help you with paying down the tax debt without much fuss. However, though it may seem that these are easy to opt for, getting the IRS agree to the settlement can be a tough thing to be accomplished.
What is tax debt settlement?
Tax debt settlement is a helpful tax debt relief option. There are various tax debt settlement options like those of the compromise offer, penalty reprieve, taking professional help with regards to the tax debt, IRS tax bankruptcy and so on.
You can take the help of a professional tax relief company. They may help you with analyzing the financial condition and also helps you with determining the best option through which you may be able to achieve tax settlement. In case of the compromise offer, if you can prove to the IRS regarding your inability to pay the IRS tax, the IRS may accept the compromise offer made by you. As per this agreement, you will be required to pay the tax, the amount of which is supposed to be less than what the actual tax debt amount was. In addition to making the payments, you will also be required to guarantee that you are going to make regular payments in the coming 5 years.
If you do have some valid reasons and if you can show that to the IRS proving your non-affordability on tax payments, almost around one-third of the penalty amount resulting from non-payment of the taxes, may get lowered. This is known as the penalty abatement option or penalty reprieve.
There is also the option for you to make partial payments. This is a kind of agreement, where you may be able to make the payments in installments. But still, the total amount you will be required to make towards the tax payments, actually lowers. You will simply be required to agree to make the payments. So, in this kind of tax debt relief option, a part of the IRS tax debt gets forgiven.
So, you can see that there are various tax debt relief options and there are some more options under the IRS tax debt settlement option. You will have to be aware of all of these, and choose one as per your needs. Rather than simply pushing away the IRS tax problem, handle it in a way so that it does not get more complex in the process. Talk to the IRS, collect papers that you may need to show as proof of your inability to make the payments and also talk to tax help professionals.