how to settle your tax debt with the irs Minneapolis, MN

Options To Settle Your Tax Debts

If you owe tax debt to the IRS, it can be a very stressful experience.  Fortunate for you, there are six options for you to settle your tax debt.   These six tax settlement options for your  tax debt includes:

Tax Relief: Offer in Compromise to Settle Back Taxes

An Offer In Compromise becomes one of the best options for settling one’s back taxes.  In an Offer In Compromise, the IRS takes less money for payment of the total tax debt you owe.  To calculate your potential offer you will need to multiply your net assets by 80% plus your disposable income multiple by twelve or Twenty-four months depending how you plan to pay your offer.  Use twelve months if you can afford to pay the 20% down payment of your offer.  Use 24 months if you plan to make monthly payments on your offer.  If your offer In Compromise is accepted by the IRS, you must stay in compliance with the IRS by:  filing all tax returns on time; paying all tax estimates and tax deposits on time and you cannot incur any additional tax debts.


Tax Relief: Amend and Replace Substitute Past Tax Returns s to Settle Back Taxes

Filing an amended tax return, or filing a tax return to replace a substitute tax return is another option to settle your tax debts. Amending your tax return is when you change your original tax return after filing using form 1040X for your individual taxes.  Everyday taxpayers modify their tax returns and add missing tax credits and/or deductions to their tax returns to reduce their tax debts.

You can also settle your tax debts by filing your original tax returns and replacing substitute tax returns.  A substitute tax return is when the IRS files a delinquent tax return on your behalf.  Keep in m the IRS is worried about your income and may not have the pertinent information about your deductions and tax credits.  Replacement substitute returns with filing your original return could settle tax debt for less than your original tax debt balance.

Tax Relief:  Expiration of IRS Period to Collect (Statute of Limitations) to Settle Back Taxes

Expiration of statue limitation is another possibility of settling your tax debt. The IRS has a period of 10 years from the date of assessment to collect your back taxes.   IRS can make mistakes, so there are taxpayers who are currently paying on tax debts that should have already been removed from their tax records.  You may need to petition the IRS to remove these expired taxes off of your tax account.


Tax Relief:  Partial Payment Installment Agreement to Settle Back Taxes

Entering into a Partial Payment installment agreement is one of the best ways to settle your back taxes.  A Partial Payment Installment agreement is when you make a small monthly payment on your tax debt even though you may owe the IRS thousands of dollars.  For example, there are taxpayers who owe the IRS over 100 thousand but are simply required to make only $50 – $100 monthly payments. If these taxpayers make their monthly payments on time they will eventually settle their tax debt once the time period the IRS can collect the tax expires.   A thorough financial analysis of your finances is required to see if you’re eligible for the program.  Call us today at (888) 260-9441 for your free case review.


Tax Relief: Economic Hardship Status (Currently Non Collectible) to Settle Back Taxes

Currently not collectible hardship is when the IRS could grant you when your necessary expenses are higher than your monthly income.  Necessary expenses can include: mortgage, utilities, food, clothing, child support, car payments, health insurance, out of pocket medical expenses and student loans.  There are thousands of people around the United States, who owe thousands to the IRS but due to being on Currently Non Collectible Hardship status they aren’t required to make any payments to their tax debts.  To be considered for Non Collectible Hardship status you will need to fill out a 433-F or 433-A if working with a Revenue Officer.


 Tax Relief:  Getting Rid of Penalties (Penalty Abatement) to Settle Back Taxes

Penalty abatement for reasonable cause could be another option for you to settle your tax debt.  Penalties can make up to 35% of your tax debt balance.  So there could be significant potential for settlement of your back taxes.  The IRS will get rid of your penalties if you can prove there is a reasonable cause for your tax problems. Some examples include serious medical issues, drug issues,   bad advice from your accountant, loss of records, death in the family; etc.  Reasonable cause in general is a major event that happened to you or your family and due to this event, you incur tax debt or impeded you from staying in compliance.

If you owe the IRS a tax debt, it’s important that you follow through very quickly to address your tax problems. If you don’t, aggressive collection activity such as levies and wage garnishments could happen to you.  It’s important that you work with a qualified licensed representative to walk you through your options and effectively settle your tax debt to the lowest payment allowable by law.   Call us at (888)-260-9441 for a free case review and see if you are eligible for any of above-mentioned tax settlement options.