You may have heard on the radio, TV, and online that you can settle your tax bill for less than what you owe. But are these claims valid? And can you settle your tax debt without hurting yourself in the long run?
Some of these national tax resolution firms you hear advertising offer minimal service; look at their Google and Yelp Reviews. So, knowing whom to trust and getting educated on your options to resolve your tax problem is essential.
As a local expert tax attorney-CPA-EA with Harmon Tax Resolution, LLC – a tax law firm serving the areas of Port Saint Lucie, Stuart & Fort Pierce, Florida, I encourage all readers facing a tax problem to contact us for a free consultation.
The truth is that though it's often more complicated than they claim to settle for less than you owe the IRS, it is possible, and you must first learn if you qualify for the program. The IRS program is called an Offer-in-Compromise, but settling is not necessarily bad.
What is an Offer In Compromise?
An Offer-in-Compromise is a negotiated agreement between the IRS and the taxpayer intended to help taxpayers who do not have the resources to pay the tax debt. If you qualify, you may be able to settle your entire tax bill for significantly less than what you owe. You must establish that you genuinely can't afford to pay back taxes or that doing so would cause extreme financial hardship. This can apply, for example, if you have become disabled.
You must be current on all legally required income tax returns and current on any estimated tax payments if you are self-employed and cannot file for bankruptcy.
The IRS would instead take an Offer-in-Compromise than send you to collections and potentially get less money. Taking an offer in compromise will not affect/impact your credit score. Accepting your Offer-in-Compromise could be a far better financial decision in the long run.
Is an Offer In Compromise Easy to Apply For?
Working out what offer to make on your own and learning the whole process can be challenging. That's like representing yourself in a court of law without a lawyer. Not ideal. A better answer is to find a tax resolution specialist that can help you with the process to see if you qualify and determine what you will have to pay. For a tax resolution specialist to represent you, they must be a licensed CPA, an Enrolled Agent, or a licensed Attorney. Will Harmon happens to be all three, which ensures you complete coverage of your tax issue.
One of the great things about working with a qualified and local tax resolution firm is getting protection from the overbearing IRS, letting you sleep better at night knowing you're on your way towards permanent tax resolution. They can head off any impending paycheck garnishments or levies on your bank account.
Settling with the IRS is a good thing and is often the best answer to dealing with your back tax bill and moving on with your life.
For additional information, please read other blogs regarding Offer-In-Compromise:
- "IRS Offer In Compromise May Benefit You"
- "Who Would Be the Best Source of Advice for You to Follow Regarding Filing an Offer in Compromise"