{"id":502032,"date":"2022-11-18T16:58:58","date_gmt":"2022-11-18T16:58:58","guid":{"rendered":"https:\/\/resolveyourtaxes.com\/?p=502032"},"modified":"2022-11-18T17:04:31","modified_gmt":"2022-11-18T17:04:31","slug":"11-18-22-how-to-reach-a-tax-debt-settlement-with-the-irs","status":"publish","type":"post","link":"https:\/\/resolveyourtaxes.com\/?p=502032","title":{"rendered":"11\/18\/22 How to Reach a Tax Debt Settlement With the IRS"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"502032\" class=\"elementor elementor-502032\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-106fbb53 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"106fbb53\" data-element_type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t\t\t<div class=\"elementor-background-overlay\"><\/div>\n\t\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-21d25fcf\" data-id=\"21d25fcf\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-8f08b85 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"8f08b85\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-inner-column elementor-element elementor-element-69aa65f5\" data-id=\"69aa65f5\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-5a4c48b7 elementor-widget elementor-widget-heading\" data-id=\"5a4c48b7\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h1 class=\"elementor-heading-title elementor-size-default\">11\/18\/22 How to Reach a Tax Debt Settlement With the IRS<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-bd03f2a elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"bd03f2a\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-91e2fbc\" data-id=\"91e2fbc\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-cf250a7 elementor-toc--minimized-on-tablet elementor-widget elementor-widget-global elementor-global-705 elementor-widget-table-of-contents\" data-id=\"cf250a7\" data-element_type=\"widget\" data-settings=\"{&quot;exclude_headings_by_selector&quot;:&quot;h1&quot;,&quot;headings_by_tags&quot;:[&quot;h2&quot;,&quot;h3&quot;,&quot;h4&quot;,&quot;h5&quot;,&quot;h6&quot;],&quot;marker_view&quot;:&quot;numbers&quot;,&quot;minimize_box&quot;:&quot;yes&quot;,&quot;minimized_on&quot;:&quot;tablet&quot;,&quot;hierarchical_view&quot;:&quot;yes&quot;,&quot;min_height&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]},&quot;min_height_tablet&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]},&quot;min_height_mobile&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]}}\" data-widget_type=\"table-of-contents.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-toc__header\">\n\t\t\t<h4 class=\"elementor-toc__header-title\">\n\t\t\t\t11\/18\/22 How to Reach a Tax Debt Settlement With the IRS: Contents\t\t\t<\/h4>\n\t\t\t\t\t\t\t<div class=\"elementor-toc__toggle-button elementor-toc__toggle-button--expand\"><i class=\"fas fa-chevron-down\"><\/i><\/div>\n\t\t\t\t<div class=\"elementor-toc__toggle-button elementor-toc__toggle-button--collapse\"><i class=\"fas fa-chevron-up\"><\/i><\/div>\n\t\t\t\t\t<\/div>\n\t\t<div class=\"elementor-toc__body\">\n\t\t\t<div class=\"elementor-toc__spinner-container\">\n\t\t\t\t<i class=\"elementor-toc__spinner eicon-animation-spin eicon-loading\" aria-hidden=\"true\"><\/i>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ff86960 elementor-widget elementor-widget-heading\" data-id=\"ff86960\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">How to Reach a Tax Debt Settlement With the IRS<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cfd42e4 elementor-widget elementor-widget-text-editor\" data-id=\"cfd42e4\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Having a large debt balance is never good but it can be incredibly nerve-wracking when your\u00a0creditor is the Internal Revenue Service (IRS). Luckily, you may be able to reach a tax debt settlement\u00a0with the IRS, depending on your personal situation. If you\u2019re able to get your agreement, called an \u201c<a href=\"https:\/\/www.irs.gov\/payments\/offer-in-compromise\">offer in compromise<\/a>,\u201d approved, you may be able to settle your tax debt for less than the full amount you owe. Consider working with a financial advisor\u00a0as you file your taxes and, if needed, respond to an IRS audit as they can help you navigate the whole process.<\/p><p>Tax debt settlements are agreements between the IRS and someone who holds a tax debt. Tax debts can occur if you\u2019re behind on paying your taxes, improperly filed your taxes, or have previously committed fraud. The best way to resolve a tax debt is by not getting one in the first place. Work with a well-qualified tax professional who can help ensure that you don\u2019t miss anything or improperly claim deductions\u00a0that will cause problems later after an audit.<\/p><p>If you\u2019re audited and errors are found, you\u2019ll be responsible for what you owe and any interest that\u2019s accrued over time, which could add up to a significant liability. If you don\u2019t make\u00a0arrangements to pay your debt, the IRS can garnish your wages, withhold future tax returns and even seize your assets.<\/p><p>A tax debt settlement can reduce the amount you owe to the IRS. The IRS can agree to your offer and come to a settlement with you if they determine that the amount you offer is the most they can expect to collect within a reasonable amount of time. The IRS recommends that you pursue all other payment\u00a0options before trying to submit an offer in compromise seeking a tax debt\u00a0settlement.<\/p><p>The IRS has explicit, rigid guidelines for who can and cannot qualify for an offer in compromise\u00a0and has a pre-qualification tool you can use to check your eligibility on their website. You\u2019re\u00a0eligible to apply for an offer in compromise if you:<\/p><ul><li>Filed all required tax returns\u00a0and made all required estimated payments<\/li><li>Aren\u2019t currently in an open bankruptcy proceeding<\/li><li>Have a valid extension for a current year tax return (if you\u2019re applying for a settlement for\u00a0the current year)<\/li><\/ul><p>If you\u2019re an employer seeking a tax debt settlement, you\u2019ll need to have made tax deposits for the current and past two financial quarters before you can apply for an offer in compromise. There are also things that you shouldn&#8217;t do if you owe the IRS, such as ignore their communications.<\/p><p>You can submit an Offer in Compromise yourself, but it\u2019s a good idea to work with a qualified tax professional and even a tax attorney. The process is complicated and if you\u2019ve already made errors with the IRS that got you into this mess, it\u2019s a good idea to have your work reviewed by someone who knows what they\u2019re doing. The IRS considers your ability to pay, income, expenses and asset balances when considering your offer. To apply you\u2019ll need to:<\/p><ul><li>Complete Form 433-A if you\u2019re an individual or 433-B if you\u2019re a business, along with all\u00a0required documentation listed on the forms<\/li><li>Complete Form 656 (you\u2019ll need to complete multiple if you have individual and business\u00a0tax debt)<\/li><li>Submit a non-refundable $205 application fee<\/li><li>Submit your initial non-refundable payment\u00a0for each Form 656<\/li><\/ul><p>You\u2019ll need to choose a payment option for your offer.\u00a0You can go with a lump-sum cash offer, in which case you\u2019ll submit an initial payment of 20% of\u00a0your total offer amount when you send in your application. You\u2019ll have to pay the remaining\u00a0balance in five installments or less if your offer is accepted.<\/p><p>If you go with periodic payments, you\u2019ll pay monthly installments of an amount you choose,\u00a0sending in your first payment with your application and continuing to pay monthly until you hear\u00a0a decision on your offer. If the IRS accepts your offer, you\u2019ll continue to pay that monthly amount\u00a0until your debt is paid off.<\/p><p>Determining what amount to offer and which payment plan is right for you can be difficult. Even if you don\u2019t hire an attorney or tax advisor to submit your offer, it\u2019s a good idea to consult\u00a0with one so you know what offer is most likely to be approved.<\/p><p>The IRS has strict requirements for who can and can\u2019t settle tax debt and how to apply for your own potential settlement. Working with a professional can greatly increase your odds of doing it right and having your offer approved. If you are able to reach a tax debt settlement, you can reduce the amount you owe and get the IRS off your back sooner. This could help you get your finances on track and avoid more serious penalties.<\/p><p>Click here to read the article:\u00a0<\/p><p><a href=\"https:\/\/smartasset.com\/taxes\/tax-debt-settlement\">How to Reach a Tax Debt Settlement With the IRS &#8211; SmartAsset<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-ed0c9c6 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"ed0c9c6\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-inner-column elementor-element elementor-element-f4e7ed0\" data-id=\"f4e7ed0\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap\">\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Having a large debt balance is never good but it can be incredibly nerve-wracking when your creditor is the Internal Revenue Service (IRS). Luckily, you may be able to reach a tax debt settlement with the IRS, depending on your personal situation.<\/p>\n","protected":false},"author":1004,"featured_media":502002,"comment_status":"closed","ping_status":"open","sticky":false,"template":"elementor_header_footer","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-502032","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=\/wp\/v2\/posts\/502032","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=\/wp\/v2\/users\/1004"}],"replies":[{"embeddable":true,"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=502032"}],"version-history":[{"count":4,"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=\/wp\/v2\/posts\/502032\/revisions"}],"predecessor-version":[{"id":502036,"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=\/wp\/v2\/posts\/502032\/revisions\/502036"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=\/wp\/v2\/media\/502002"}],"wp:attachment":[{"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=502032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=502032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/resolveyourtaxes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=502032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}