Settle with the IRS for Pennies on the Dollar
Are you swimming in IRS debt? The good news is that it is very possible to settle tax debt for less than the amount you owe to the IRS. There is something called an Offer in Compromise that you can fill out and send to the IRS. However, this isn’t something that the IRS just hands out to people who request it. You need to prove that the amount you are trying to settle for is the maximum amount the IRS can expect to receive. A tax attorney in Atlanta affiliated with the Law Office of Max Benkel can also help you through this entire process.
Step-by-Step Process
If you need assistance with any of the following steps, you should consider consulting a Georgia tax attorney since they are more familiar with the laws, and how the IRS operates. They are also familiar with Atlanta tax law.
In order to settle tax debt, you need to first make sure that you apply for an Offer in Compromise by filling out Form 656. You will then have to pay a $186 application fee. The IRS will need to know the details regarding your income, assets, expenditures, and equity. This means that you must disclose your financial situation in full.
If you are self-employed or are considered a wage earner, you must complete Form 433-A which is known as the Collection Information Statement. This form needs to be submitted along with the original application.
The IRS will review your entire application package. If the IRS does accept your offer, then negotiations can begin.
Once you and the IRS have reached an agreement on the percentage of back taxes you can afford to pay back to them, you will have 2 years to repay that amount in full.
Additionally, you must continue to file taxes each year. If you happen to receive a refund when you file your taxes, the IRS will apply that refund towards your settlement balance.
How can an attorney help?
Georgia tax attorneys can work as your legal advisers as well as financial consultants. Tax attorneys have a background in accounting or finance and may have even completed a law degree. Tax attorneys may be able to assist you if you owe back taxes to the IRS.
Tax attorneys in Atlanta can help taxpayers respond to notices that they have received from the IRS and correct any account issues. If you have decided not to file a form for Offer in Compromise, you can hire a tax attorney to help settle with the IRS regarding back taxes. They can still settle for a fraction of what you actually owe.
Tax attorneys can also end wage garnishment and levies on bank accounts. Your tax attorney can also settle payroll taxes as well as file any tax returns that are delinquent. If you are dealing with any other tax problems, a tax attorney Atlanta GA can help with any other tax issues that you may have.
Things to Consider
Several things you should keep in mind as you settle debt include the following:
- Interest & Penalties will continue to accrue- Keep in mind that penalties and interest will continue to apply while the IRS considers your OIC. Once a settlement has been reached, all penalties will stop.
- Bankruptcy blocks all tax debt settlements- If you are planning on filing for bankruptcy, any tax debt that you have will be resolved.
- You may get the application fee back- $186 for the application fee may be hard for anyone to manage, especially if you are already struggling with paying back taxes. If the IRS determines that your hardship is severe, they may refund you the $186 fee.
- Pay settlement in installments- If the IRS reaches an agreement, the settlement amount does not have to be paid in one lump sum. You can choose the periodic payment options that give you the ability to settle your debt in installments. This means that you will pay the IRS back each month with fixed payments.
Don’t forget to consult with Atlanta tax attorneys for any further questions you may have.
