IRS TAX RELIEF CONSULATION

#1: Accrual of Penalties and Interest Persists

Very few circumstances halt the accumulation of IRS penalties, except for filing an Offer in Compromise. Throughout the consideration of your offer, penalties and interest on penalties will continue to amass. However, once you reach a settlement, this issue ceases to exist. You simply pay the agreed-upon amount, and you're released from any obligations.

#2: Tax Debt Settlement is Hindered by Bankruptcy

When filing for personal bankruptcy, tax debt is generally resolved alongside other outstanding debts. Consequently, you cannot have an ongoing bankruptcy case while simultaneously seeking tax debt settlement. If you have already initiated bankruptcy proceedings, the courts will address your tax debt issues during the process.

#3: Possibility of Application Fee Refund

If the burden of paying your taxes is causing extreme financial hardship, managing the $205 application fee may be challenging. The positive news is that the IRS may refund the fee if they determine your financial situation to be severely distressing. They will inform you after processing your offer whether you are eligible to request a refund.

#4: Form 433-A Aids in Determining an Appropriate Offer

Merely proposing an arbitrary amount to the IRS will not guarantee acceptance. Likewise, you need not guess the appropriate figure. The negotiation for settlement always commences with the amount determined through Form 433-A. For the record, if you are seeking settlement as a business, there is also Form 433-B available.

#5: Settlement Payments Can Be Made in Installments

Paying back the entire amount in one lump sum is not mandatory. You have the option of selecting the OIC Periodic Payment approach, allowing you to settle the debt in installments. Essentially, you make fixed monthly payments to the IRS. If you have surplus funds, you can pay more than the minimum required amount. However, you must ensure that you pay the full agreed-upon amount within two years of accepting the settlement.

#6: Defaulting on an OIC Yields Severe Consequences

Failing to honor the agreed-upon payment will result in severe repercussions from the IRS. You will be held accountable for the original tax debt, minus any previous payments made. Additionally, all penalties and accrued interest charges will be reinstated. Moreover, the IRS will be significantly less inclined to cooperate with you, making a second settlement agreement highly unlikely.

How to Settle Tax Debt on Your Own

You have two options for filing an Offer in Compromise: seeking assistance from a tax debt resolution service or attempting to file independently. If you prefer to settle tax debt on your own, simply download the IRS Form 656 Booklet. It contains Form 656 and the 433-A form, which you need to complete for your financial disclosure. Fill out the forms and submit them to file independently.

A Word of Caution Regarding Self-Settlement of Tax Debt

Form 433-A necessitates a comprehensive financial disclosure, making it quite lengthy. In fact, it consists of ten sections. If you find filing your taxes to be complicated, this process is significantly more intricate. It is crucial to complete the form accurately and in its entirety; otherwise, your OIC application will be rejected by the IRS.

As mentioned previously, OICs are not readily accepted by the IRS. If there is any possibility that you can repay the full amount, your OIC will not be approved. Furthermore, the IRS will reject your application if you possess assets that can be liquidated to settle the debt.

Therefore, demonstrating your eligibility for an Offer in Compromise is a challenging task. Unless you are well-versed in the process, we recommend working with a resolution team!

Doing so will increase your chances