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Negotiate, Settle, & Reduce IRS Tax Balances

Negotiate, Settle, & Reduce IRS Tax Debt

Do you feel like you’re in over your head when it comes to resolving your IRS taxes owed? So many of us get behind on our taxes and never catch up. Going up against the IRS by yourself can be an intimidating and daunting task and there is no shame in looking for help with IRS taxes owed. Few people use the resources that are readily available to assist them with their IRS taxes owed. If left unchecked, your taxes owed can cost you your wages, home, and assets. If you are struggling to find IRS taxes owed relief, here are 10 helpful ways you can resolve your IRS taxes owed and get back to financial stability.

Tax Balance Settlement Strategies

1. IRS Fresh Start

The IRS Fresh Start program can help you pay your taxes back over by allowing you to make payments over several years (up to 72 months). This way you can make monthly payments that are more affordable than large lump sums. If you qualify for the program, your payments will be based on your income, liquid assets, and how much you currently owe. Some other notable benefits of this program include avoiding additional interest, penalties, and wage garnishments. Taxpayers owing $50,000 or less may be able to get tax balance help through the Fresh Start program.

The IRS is more patient than you might think, and an installment agreement means they get a payment (that you can handle) each month. The IRS carries the weight of the federal government—meaning they know they have the power to collect indefinitely so they aren’t in a hurry. Another reason is that the longer you take to pay back the IRS the more penalties they can add to your already existing balance. An installment agreement can be a great way to pay back the IRS at a rate that you can afford.

There are strict qualification requirements, but there are ways to get your total balance with the IRS reduced. Typically the IRS will only accept a compromise if they can’t collect more by traditional means of forced collection. If you need to settle IRS balances, an offer in compromise is a great way to do it.

If you can prove to the IRS that you can’t pay your tax balance without dipping below the basic standards of living, you might qualify for this special program. This won’t resolve your balance but rather defer it for a year or two while you get back to a financial position that would allow you to pay back the IRS.

Owe a significant amount in back taxes?
We can help you determine if you qualify for an Offer in Compromise.

5. File for Bankruptcy

Under Chapter 13 and 7 of the tax code, income taxes owed may be eligible for discharge. Chapter 7 will allow a full discharge of the sum of your allowable taxes owed—while chapter 13 will allow for a payment plan to repay some of your taxes owed while the rest is fully discharged. Contact a tax specialist for help with your IRS taxes owed before filing for bankruptcy.

If your husband or wife fails to pay their taxes and you have a joint income account, you may be able to relieve yourself of any taxes owed from the IRS. As long as you fit within the IRS guidelines, you may qualify for Innocent spouse relief. This can be a viable way to settle IRS taxes owed.

Depending on the kind of taxes owed you have with the IRS, you may be able to have all of your penalties removed. This is something you can ask for during a settlement or offer in compromise. Typically the IRS isn’t going to wipe away your penalties without something in return, but done correctly, this can be a great way to reduce IRS taxes owed.

When you’re in taxes owed with the IRS they can start taking a portion of your wages to get back what they’re owed. Usually, a levy against your wages won’t happen until after your accounts have been frozen and the assets within them confiscated. The IRS can take a portion of your paycheck directly from your employer each pay period. If this is happening to you, it might be time to negotiate IRS taxes owed relief. If you can prove to the IRS that you don’t have the funds to meet the basic standards of living because of the levy, you may be able to have the garnishment lifted.

When you owe back taxes to the IRS one of the first things they will do issue a notice to levy your bank accounts. 30 days after the final notice, the IRS will freeze your bank accounts. 22 days after the freeze, the IRS will take the funds that were frozen. These funds are nearly impossible to get back once they are taken. If you can, get your bank levy released before the bank hands over your funds—seek out a professional for help with IRS taxes owed as soon as you receive your first notice from the IRS.

From the start of the initial assessment, the IRS has a 10-year window to collect all of the back taxes that you owe. If you ever wondered how to get out of IRS taxes owed, this is a viable option. Waiting out the IRS isn’t going to be your best option in most cases. However, with the help of an experienced tax attorney or specialist, you may be able to plan out a way to wait out the IRS.

11. Lump Sum Payment

Paying back your taxes in one lump sum can be a great way to get rid of any penalties and potentially reduce the amount you have to pay IRS. Paying back the IRS in one lump sum is going to save the IRS a lot of time and money on your case. It might be difficult to pay back what you owe all at once, asking a professional about help with your IRS taxes owed can tell you if this is going to be the best options for solving your taxes owed.

Receive a notice from the IRS? Not sure what to do next?
We can help.

Working with a Professional to Settle Tax Balances

Falling behind on your taxes can have very serious consequences. If you need help with IRS balances, your best bet may be to turn to a professional. Why do you need to work with a professional? For starters, tax matters can be very complex, from wading through legal jargon to ensuring that you are submitting all of the right documentation—not to mention attempting to negotiate with the IRS.

Working with a tax expert to figure out how to settle your IRS balance can save you time and frustration, and even money if they are able to help you find a swift resolution before you accumulate more interest. This is especially the case with higher levels of overdue balances.

Our tax professionals are extensively knowledgeable about the different tax-balance-repayment options that are currently available, and how to negotiate on your behalf for the best possible terms.

What to Look For

Unfortunately, there are many “tax settlement firms” out there that claim to help individuals figure out how to get rid of IRS balances. However, many times these are scams. That’s why it’s important to do your research into the tax firm that you’re considering and ensure that you are working with tax professionals that you can trust to serve your best interests.

What to Expect

When looking for professional tax balance help, you want to ensure that you work with a tax firm that is:

  • Established
  • Well-seasoned in tax balance resolution
  • A tax expert who is passionate about helping clients
  • Record of success for clients

Many fraudulent “tax balance resolution firms” will only offer balance resolution services. A legitimate tax firm will offer an array of services and have a team of experts who can help with all aspects of your taxes.

Community Tax meets all of the above qualifications and is well-poised to help with IRS balances, no matter how severe it is.

What to Expect

If you decide to work with Community Tax to resolve your tax balance, here is what you can expect:

  • There will be a consultation where we will analyze your tax situation and propose your balance resolution options.
  • We will begin the investigation. During this portion of the process, we will file a Tax Information Authorization Form (Form 8821) with the IRS on your behalf. This will allow us to have a complete record of your tax balances.
  • Once we have a complete picture of the extent of your tax balance, we will make our recommendation for the best settlement strategy.
  • We will submit a resolution proposal to the IRS.
  • Once we negotiate an agreement with the IRS on your behalf, we can help you put your repayment plan in motion. Then, all you need to do is follow through on your obligation to remain in good standing with tax authorities.

If you have a state tax balance you need resolved, the same general process can be followed to help you clear them.

If you need help with your IRS balance or you need someone to negotiate on your behalf, Community Tax has a team expert professionals who can help you resolve your IRS Tax problems quickly and efficiently. Don’t wait until the final notice from the IRS to seek out professional help.

Tax Resolution Help.

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