Circumstances in life sometimes make it so that you are unable to pay your taxes in full. In these circumstances, your best option is usually to seek out a tax settlement. There are a number of settlement options offered by the IRS. If you are in need of a tax settlement, you should seek the assistance of a tax lawyer. The settlement options offered by the IRS are complex and difficult to file. In many cases, an experienced lawyer will be able to help you pay significantly less than you owe through a tax settlement.
What are the IRS Collection Resolutions
At J. DiMauro Law, we are here to help you through your tax settlement. We offer a number of different options for IRS Collection Resolutions including:
- Installment Agreement – An Installment agreement allows you to pay your full debt in smaller, more manageable amounts. Installment agreements generally require equal monthly payments. The amount of your installment payments will be based on the amount you owe and your ability to pay that amount within the time the IRS can legally collect payment from you.
- Currently Not Collectible – If you are unable to pay anything because of a current financial hardship, the IRS may agree to place you in Currently Not Collectible. In general, the IRS will suspend collection activities for usually one year if it believes that it cannot currently collect the tax liability. Once the IRS declares a taxpayer currently not collectible, the IRS must stop all collection activities, including levies and garnishments. The IRS must send an annual statement to the taxpayer stating the amount of tax still owed. However, this annual statement is not a bill.
- Offer In Compromise – An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS has created a process for Offers that, for the most part, has been in place for many years. Generally, there are three types of Offers available:
- Doubt to Collectibility
- Doubt as to Liability
- Effective Tax Administration
- Innocent Spouse Relief – Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows. Both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise as a result of the joint return even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can get relief from joint and several liabilities.
We will work with you to determine the appropriate IRS collection resolution for your specific situation. As your tax lawyers, we are prepared to represent you before the IRS with competence, zeal and practicality. Our experienced lawyers will develop strategies to help you achieve a positive outcome with your tax settlement.