Tax Settlement: The Benefits It Can Offer To Taxpayers with Tax Problems

What Is An IRS Tax Settlement ?

A tax settlement refers to some tax options provided by the IRS where a taxpayer may settle his tax liabiliy. For valid reasons, the IRS may abate penalties or interests on tax debts. However, the taxpayer must come forward, talk with the IRS, negotiate and show cause why he is qualified to avail of a particular tax settlemen t option. Any tax settlement option chosen by the taxpayer will depend upon the taxpayer's present financial condition. Normally, taxpayers are required to pay tax debt in full, but in some occasion and for some valid causes, tax may be reduce or completely abrogated.

Paying less than the amount of the tax owed

The IRS prefers that taxpayers will pay their taxes in full. However, for some valid grounds and certain circumstances, the IRS may allow a taxpayer to either pay his tax debt for less or come to an agreement to pay the tax due in installments in a manner provided by law. The taxpayer will determine the tax option available to him and comply with all the requirements embodied in such tax settlement option. To fill out tax information properly, a taxpayer can seek the help of Tax Solutions Tax Experts to file for the required information in his behalf. The good thing is that the taxpayer is considered a taxpayer of good standing when he is able to comply with the terms of the tax settlement program.

How to settle tax debt for less

•  Offer in Compromise

An offer in compromise is one tax settlement program available only under the following conditions:

• that there is doubt as to the correctness of the assessed tax liability (doubt as to liability);
• that the taxpayer has the possibility of not paying the tax for some grounds acceptable by IRS (doubt as to collectibility); and
• that the taxpayer can demonstrate that the collection of tax debt will cause economic difficulty to the business or the taxpayer himself or would be unfair or inequitable (effective tax administration).
• Partial Payment Installment Agreement

This tax settlement program allows a taxpayer to enter into an agreement with the IRS to pay his tax obligations within a specified period which amount can be less than the tax due.

• Penalty Abatement

A tax settlement program that could remove all or a portion of the penalties owed. Penalty abatement does not touch on the amount of tax payable, but make adjustments on the penalties attached to the principal amount of tax.

When Tax settlement option is disappoved

In all tax settlement options, the approval of the IRS must be secured. However, if for some reason, your tax settlement offer has been denied, the following tax settlement program may still be availed of:

• Installment Agreement

Under this tax settlement , the taxpayer is authorized to pay the tax due in regular monthly payments normally within the 3- year period. This settlement option is available if your tax obligation ranges from $25,000 or less.

• Declare “Currently Not Collectible”

This tax settlement program, suspends the collection status of the tax debt for a certain period until the taxpayer's financial situation has improved.

The Tax Solutions Network is a team of Tax Specialists composed of Accountants, Tax Attorneys, and enrolled agents who can discuss with you personally about your tax problem with skill and expertise. Contact Tax Solutions Network at (877) 482-924 for free tax advice or log on to www.taxsolutionsnetwork for more information.