Successful Tax Resolution

Settlement Options...

Settlement Plans for Individuals ...

Settlement plans encompass a number of temporary and permanent plans for arranging to pay less than the entire debt that is owed to the IRS. The IRS will attempt to collect as much of the debt as possible, without threatening the taxpayer's ability to meet their basic living expenses. However, the IRS will not consider any settlement that supports an excessive lifestyle for the taxpayer.

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Partial Payment Installment Agreements ...

If the minimum payments for either the guaranteed or streamlined installment agreements do not fit into your budget, you may be better off considering a partial payment installment agreement. This is a type of payment plan where the monthly payment is based on what you can actually afford after taking into consideration your essential living expenses. Unlike guaranteed or streamlined agreements, a partial payment plan can be set up to cover a longer repayment term, and the IRS may file a federal tax lien to protect its interests in collecting the debts. The IRS will ask you to fill out a financial statement (Form 433-F) to report your average income and living expenses for the past three months, plus provide paystubs and bank statements as supporting documentation. Unlike other types of installment agreements, the IRS routinely re-evaluates the terms of partial installment agreements every two years to see if you might be able to pay more.

Currently Not Collectible ...

If you do not have the means to pay taxes owed, have little assets that the IRS can levy, no income above the minimum need to cover necessary living expenses, you would most likely be able to be considered “currently not uncollectible (CNC)” to the IRS. Being considered “uncollectible” to the IRS means that they can temporarily pause collections against you under the IRS hardship rule.

If you qualify for this, you still owe the IRS money and interest will continue to accrue. Moreover, a Federal tax lien will be placed for all tax years showing an outstanding balance. However, all collection activities must be temporarily suspended against you. The IRS will then continue to monitor your financial situation to see if it improves to a point where they can demand payment. This review happens normally once a year. You will be required to send an updated financial statement every year for them the IRS to review. These statements must be accurate because they will compare it to filed tax returns to make sure everything matches. One important thing to understand is that someone who receives this status can lose it if the taxpayer create new unpaid tax liabilities in the future or misses a tax filing.

One important thing to note about being considered uncollectible is that the IRS statute of limitations is still running for those back taxes owed. The statute of limitations lasts 10 years on IRS taxes due, if they are not collected in this period, they can no longer collect on these amounts (with some exceptions). Many people have been declared uncollectible for a period of years and have ended up owing no tax once that statute of limitations for those years owed expire. Generally, if a taxpayer has unfiled tax returns, a CNC is not an option. In certain cases, if a tax levy is present, the taxpayer may get a CNC approved.

Offer In Compromise ...

An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship. The IRS considers your unique set of facts and circumstances:

  • Ability to pay ...
  • Income ...
  • Expenses ... and
  • Asset Equity

The IRS will generally approve an offer in compromise when the amount offered represents the most the Service can expect to collect within a reasonable period of time. The Offer In Compromise is a last-ditch option ... not a first-option IRS debt reduction approach. The Offer in Compromise program is not for everyone. You should never consider an Offer In Compromise on your own. You need to understand the affect it will have on your Stature of Limitation on your IRS debt; the amount of disclosure required to file an offer; the amount of payments required while the offer is under consideration; and the length of time required for processing.

 

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ProAuditGuard begins with a risk analysis of your Prior Year's Returns
... then, we continually monitor your IRS tax account
to identify pending actions such as changes on your account
to identify Audits, Liens, Collections, Significant
Balance Changes, Compliance and more ...