Everything A Taxpayer Needs to Know About Tax Settlement and Negotiation
Updated: Nov 3
The IRS has a lot of power. If you owe money, they will come after you to get it in one way or another. This includes seizing your assets and garnishing your wages. They can also seize any refunds that are due to you if they deem the amount owed is too high for them to wait for payment. Taxpayers are often encouraged negotiate with the IRS and reach a settlement. This way, your tax liabilities become the thing of the past.
What Is Tax Settlement?
A tax settlement is an agreement acceptable to the IRS or state taxing authorities that permits a taxpayer to pay off an outstanding tax liability for a lower sum than what was owing originally. A tax settlement is not a guarantee, but it can be worth considering if you are going through financial hardship and have a way to prove it. This process takes time so patience from both parties is necessary. As long as discussions are progressing in good faith, though, then progress will happen quickly enough for these types of settlements to work out.
How Does It Work?
A tax settlement is a negotiation between you and the IRS to either pay back some of what is owed or have it forgiven. The most important thing for taxpayers who want are inclined to embark on a tax settlement, an Offer In Compromise (OIC) with the IRS will be deemed necessary. An OIC isn't just a one-time conversation; filing one means that negotiations continue until there's been resolution on both sides.
The account is considered settled-in-full once the altered balance is paid based on mutual agreement, which means the taxpayer is no longer subject to late fines and other forms of penalties that would otherwise be charged.
This way, the taxpayer also avoids having tax liens placed on his or her home or company, a bank levy placed on one or more available accounts, or a wage garnishment placed on his or her paycheck.
Need A Debt Settlement?
Debt settlements are usually necessary due to owing back taxes to the IRS, so reducing the issue will render the back taxes easier to pay back. The Fresh Start program accelerates the process of repaying a large tax debt while also removing some of the constraints that come with owing the IRS large quantities of money, such as liens, levies, wage garnishments, and penalties. This program that consolidates many major relief programs (ex. Offer In Compromise, Penalty Abatement, etc.) into a one-size-fits-all assistance program. Our clients are referred to our Fresh Start Program in order to avoid bankruptcy, acquire debt relief, and settle their debts in a quick manner. Let us give you a helping hand today!
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