Resolve and Settle with the IRS
How Much Will the IRS Settle For?
If you owe a large amount of money to the tax agency and are wondering how to settle debt with the IRS, Wiggam & Geer can help you evaluate your options and negotiate the best settlement for your situation.
Taxpayers who owe money to the IRS have a few different options for resolving and settling that debt. These include offer in compromise, installment agreement or partial-pay installment agreement, and bankruptcy. Determining which strategy is best involves an IRS evaluation of the taxpayer’s financial situation and their ability to pay. The IRS will also look at a taxpayer’s annual income, expenses, disposable income, and equity in assets.
Will IRS Settle for Less Through an Offer in Compromise?
An offer in compromise is usually the best option when a taxpayer cannot pay the entire tax debt or doing so would create severe financial hardship. The taxpayer and the IRS compromise on the amount due and come up with a reasonable figure that has collection potential.
In order to be eligible for an offer in compromise, taxpayers must be:
- up to date on past returns
- current on quarterly estimated tax payments
- financially solvent enough to pay future taxes for the next five years
The process to reach an offer in compromise can take from months to over a year, and it can be complex. Taxpayers must apply for a settlement offer, submit documentation, establish eligibility, and then negotiate the settlement. Hiring an experienced tax attorney to settle IRS debt can help ensure that you reach the best deal.
Can You Settle With the IRS Through an Installment Agreement?
In an installment agreement, the taxpayer pays the entire debt owed through installments over a period of time. A partial-payment installment agreement differs from a regular installment agreement. In a partial-payment installment agreement:
- the overall debt is reduced
- the negotiated figure is paid in installments
- the IRS can reevaluate the agreement every two years
- if the IRS determines the taxpayer can make larger monthly payments, the agreement might be renegotiated
As with the offer in compromise, the taxpayer must be up to date with past returns and quarterly estimated payments in order to qualify for either installment agreement. Again, hiring an experienced tax attorney to help settle with the IRS is the best strategy for determining whether an installment agreement is the best option.
How To Settle With the IRS in a Bankruptcy
For taxpayers who cannot pay their tax debt, bankruptcy might be the best option for settling with the IRS. In negotiating a bankruptcy settlement, the taxpayer might end up with a payment plan for tax debt or have the tax debt totally discharged. The determination depends on the facts of the case and the type of bankruptcy filed.
If you have tax debt that you cannot pay, it is best to act quickly and hire an experienced tax attorney. Our team of experienced tax attorneys can help you evaluate all your options and represent you. Give us a call today at (404) 609-1300 to get started.
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