IRS Tax Debt Relief | How to Resolve | Flat Fee Tax Service | San Diego
Updated: Jul 22
Tax debt relief: How to resolve your debt with the IRS
What is IRS tax debt relief?
Tax debt relief is a way the government helps you when you can’t afford to pay your tax bill. This comes in the form of a payment plan or a settlement in which the IRS agrees to settle your tax debt for less than the full amount you owe.
If you owe money to the federal government and don’t think you can afford the hefty bill, it’s better to evaluate your options and make a plan well before your taxes are due on Tax Day, which typically falls on April 15.
When is tax debt relief an option?
Tax debt relief is a resolution option when you owe the IRS money and can’t afford to pay the tax debt. Before you have time to stress about the thought of owing money, you’ll need to actually prepare and file of your tax returns first. This not only ensures you’re doing the right thing, but it’ll also quantify how much money you owe the IRS.
Once you have a firm number for the amount you owe, you’ll be able to explore relief and tax forgiveness options if the IRS concludes you lack the resources to pay. The sooner you complete your tax return, the more time you’ll have to solidify a plan. If you wait until Tax Day, you might have limited options to seek relief.
While there are a few ways the IRS can work with you on your tax debt, there are also some tax relief companies, like Flat Fee Tax Service, that can work on your behalf to help you settle your debt. Unfortunately, not every company has your best interest at heart.
How to determine if a tax debt relief firm is legitimate or a scam. Look for signs of a scam:
1. Guaranteeing your IRS debt will be reduced or eliminated. The IRS forbids all tax professionals from guaranteeing a specific result.
2. Failure to review your financial situation during the consultation.
3. Promising debt forgiveness. As stated above, the IRS forbids any guarantee of a result being made.
4. Requesting the same documentation over and over, or ignoring you after you’ve paid for services.
5. The tax debt relief company claims, without documentation, that the IRS rejected your request or you no longer qualify for help.
IRS tax debt forgiveness programs available:
When you discover it’s time to pay Uncle Sam but you don’t have the money, don’t panic. There are a few different options you have with the IRS for tackling your tax debt.
Installment Agreement (IRS Payment Plan)
Before you agree to an IRS Installment Agreement, consult with an experienced tax professional.
You can complete an installment agreement when you complete your tax returns. This is Form 9465 and in most circumstances, the IRS will approve your agreement request if you owe less than $10,000 and you’ve successfully filed all income tax returns in the last five years. However, if you owe $50,000 or less, you may be able to avoid filing Form 9465 and establish an installment agreement on the IRS website.
The IRS says that most installment agreements meet the criteria. This method allows you to make small monthly payments until your debt is paid in full. The maximum repayment term is six years. If you can pay the money within four months, you’re not a good candidate to apply for an installment agreement, and the IRS advises you to use the online payment system.
If you owe more than you know you can afford to pay and can prove it’ll be detrimental to your finances, you might qualify for an Offer in Compromise (#OfferinCompromise). An OIC lets you settle your debt for less than you owe and is usually only an option if other payment choices have been exhausted.
The IRS determines if you’re eligible by checking your income, expenses, asset equity and your ability to pay. If the IRS believes you can pay the amount — in full or through an installment agreement — your OIC won’t be accepted.
The IRS, on average, receives 80,000 Offer in Compromise submissions every year. The IRS has been approving approximately 42% of the 80,000.
The tax professionals at Flat Fee Tax Service has been averaging a 96% Offer in Compromise approval rate.
Are you looking for tax debt relief?
While there are plenty of companies that might offer tax debt relief services, be cautious about handing over your cash.
The tax professionals at Flat Fee Tax Service provide valuable IRS Tax debt relief at a very affordable fee. Our teams are located in San Diego, California, and Clearwater, Florida. We are BBB Accredited and have always maintained an A-Plus rating. Our comprehensive consultations will take 20 to 30 minutes.