Tax Debt Negotiation

Tax negotiation may not be your idea of a great time, however, there’s a chance that you may find it necessary at some point. The good news is, there are tax negotiation specialists who can guide you through the process towards a desirable resolution.

There are a number of potential agreements that can be made to help you settle your tax debt, including paying a reduced amount through installment payments or a lump sum, making monthly payments on the full amount, or sometimes having the entire debt forgiven.

The results of your tax negotiation will be determined in part by the specifics of your financial situation and the amount of taxes that you owe. With an expert tax relief agency such as IRS Tax Relief Network, you can work with the tax authorities to achieve favorable results.

Potential Tax Negotiation Results

Settling your tax debt will relieve you of overwhelming, stressful circumstances that can negatively impact your life. There are a handful of potential results that you can reach when you use tax relief services.

Installment Payments

For those who are able to settle their tax obligations in full through regular monthly payments, an installment payment agreement may be reached. When negotiating an installment arrangement, you may have to fill out and mail in an Installment Agreement Request form and a Collection Information Statement form. IRS Tax Relief Network will help you gather the necessary data on your income and assets to help you accurately and safely disclose your information.

Partial Payments

If you are able to show that due to your financial circumstances, paying the full amount of your tax debt would cause extreme hardship, you may be able to work out a partial payment settlement agreement. When seeking to reduce your tax debt and make installment payments on the settled amount, you will have to submit a letter to the IRS which explains why you believe your total amount of debt should be lowered. If you are granted a partial payment settlement agreement, you will make monthly installment payments until the amount is paid in full.

IRS Offer in Compromise

When you obtain an offer in compromise, you are requesting to pay in full by settling your account for a greatly reduced price. Through the IRS Fresh Start Program, applying for the offer in compromise is simplified and streamlined, minimizing the work required to apply and providing relief during the waiting process.

There are three categories for eligible offers in compromise applicants.

The amount of taxes being asked for are wrong.
The person who owes taxes is able to prove that they will never be able to pay the full amount without posing extreme hardship to themselves. These taxpayers can be granted an IRS one-time forgiveness.

The tax would cause injustice for the taxpayer, typically because they are elderly or disabled.

Offer in compromise applications are not widely accepted. With the help of the IRS Tax Relief Network, you can accurately apply for an offer in compromise and increase your chances of an agreement.

Tax Penalty Abatement

Taxpayers that are able to pay the entire amount of their back taxes but need to be relieved from the penalties that have accrued, can apply for tax penalty abatement. In order to be approved for tax penalty abatement, you must be able to prove that you missed your taxes due to a hardship or that you have a current hardship that makes the tax penalty excessive. Accepted reasons for the tax penalty abatement are long-term unemployment, a death in the family, or property damage from a natural disaster. IRS Tax Relief Network can help you write and submit a letter to the IRS requesting tax penalty abatement.

Financial Hardship Status

When a taxpayer has extreme financial circumstances that make it impossible for them to pay what they owe to the IRS, they can ask to have their account placed in Financial Hardship or Currently Not Collectible Status. Accounts in this status are paused, but not erased, and taxpayers will eventually have to pay the taxes. When applying for Financial Hardship Status, you will have to provide in-depth financial information. Once certain conditions are met, your account will be re-evaluated and the status will become active again.
Statute of Limitations

In most circumstances, there is tax debt forgiveness after ten years. Some people may choose to wait out the statute of limitations to have their debt wiped clean. It can be hard to determine the exact date of the statute of limitations because it depends on when the taxes were assessed and whether the taxpayer filed bankruptcy or filed a dispute. IRS Tax Relief Network can help you determine your statute of limitations and whether or not this is the best route for you.

How Much Will the IRS Usually Settle For?

When deciding whether to accept or reject an application, the IRS follows a few steps. The IRS decides what they think you will be able to pay them in installments every month by looking at your income. Then, they look at your monthly living expenses, such as housing, food, car, and utilities.

The IRS determines your cash flow by subtracting your living expenses from your income. They then decide your offer in compromise settlement value. The final determination of the settlement amount depends on how long it will take you to repay it.

On average, the IRS settles an offer in compromise for $6,629. However, the IRS typically accepts only 40% of applications for the offer in compromise.