Tax Settlements | IRS Settlement | Flat Fee Tax Service
Updated: Nov 22, 2019
Tax Settlements - IRS Settlement If you have cable tv, you have seen 4 or 5 tax relief companies running ads, which promise tax settlements that allow taxpayers to pay their debt for “pennies on the dollar.”
The IRS really offers a multitude of programs that allow a taxpayer to resolve and settle their back-tax debt. Tax settlements may allow you to settle your back-tax debt for less than the full amount you owe.
Who Qualifies for Tax Settlements?
IRS settlement options are designed for taxpayers who can’t settle their full tax debt within their lifetimes or doing so would create an extraordinary financial hardship.The IRS will only consider tax settlements from taxpayers who are up-to-date with their tax filings and established payment installments. In addition, the taxpayer must not have an open bankruptcy proceeding. The IRS provides minimal Tax debt help if you’d like to apply for an IRS settlement on your own; the IRS has made an instruction booklet available to taxpayers for this purpose. THE SMART MOVE IS TO HAVE AN EXPERIENCED TAX PROFESSIONAL PREPARE YOUR IRS SETTLEMENT. Many people opt to hire a tax professional to maximize their opportunity to achieve a favorable settlement outcome. FLAT FEE TAX SERVICE CLIENTS HAVE, ON AVERAGE, SAVED 96% OF THE TAX DEBT AND HAVE A 95% IRS SETTLEMENT SUCCESS RATE. Tax Settlements - Approval Determinations
IRS settlement approvals are commonly granted when the revenue agent perceives the settlement offer as the most it can reasonably expect to collect from the taxpayer in a reasonable period of time. The revenue agent comes to a determination after scrutinizing the taxpayer’s income, assets, and expenses.
THE IRS WANTS TO DO 2 THINGS: COLLECT MONEY AND CLOSE CASES. A TAX SETTLEMENT WILL ACCOMPLISH BOTH OF THOSE GOALS, EVEN IF THE SETTLEMENT IS $100. Although one may qualify for approval on their tax settlement proposal according to the eligibility rules, the revenue agent must then examine the validity of the proposal, which must include the proper documentation, as well as appropriate first payment.
IN 2016, THE IRS APPROVED APPROXIMATELY 42% OF THE 80,000 OFFER IN COMPROMISE SUBMISSIONS. What Should be Expected When Tax Settlements are Submitted to the IRS.
The IRS settlement process starts this way: all tax settlements are sent to the IRS offices located in Tennessee or Long Island, NY. The job of the IRS at those sites is to see if you paperwork has been done correctly. They do not care if you have a valid reason for a tax settlement, the only thing they want to know is if they can reject any of the tax settlements submitted because of errors in the paperwork. The IRS calls it "unprocessable." Tax settlements deemed to be "unprocessable" will be returned to the taxpayer without an explanation. You will have to re-start the process. During the time period in which all tax settlements are being reviewed for eligibility and approval, you may receive a Notice of Federal Tax Lien from the IRS. This is common and doesn’t indicate that the revenue agent has made a determination. Other collection activities, such as an IRS wage garnishment and bank levies will cease. The taxpayer doesn’t need to continue making the payments on his or her current installment agreement, if applicable until the IRS has made a decision. Furthermore, if the IRS doesn’t make their decision within two years of the date that the proposal was filed, it will automatically be approved. If you receive an acceptance on your IRS settlement, federal tax liens will be released once the Offer in Compromise (#IRSsettlement) is paid in full. You will forfeit any refunds due to you within the calendar year of the date of the acceptance of the proposal. These funds will be applied to the back-tack debt. If your proposal is rejected, you have the right to appeal the decision within 30 days by filling out Form 13711.