Have you been wondering what it would take to settle with the IRS? It’s a daunting task to accomplish. In this article, we want to equip you with the knowledge you need to know about settling with the IRS. We’ll cover the basics such as what settling means, the options available, and how to qualify for each option. Tax issues are intricate, but that shouldn’t stop you from seeking help. Knowing what’s involved in settle with irs can make a difference in achieving the best possible outcome for you or your business.

What does Settling with the IRS mean? 

To settle with the IRS means coming to an agreement with them to pay less than the full amount you owe. The IRS deals with tax issues by enforcing tax laws, reviews returns, and auditing taxpayers. If your taxes are in arrears and you cannot pay in full, options are available to you.

What options are available?

There are four options in settling with the IRS:

1. Payment plan

2. Offer in compromise 

3. Partial payment installment agreement

4. Currently not collectable

Payment Plan: If you owe the IRS, but you cannot pay all at once, the payment plan is the option to consider. With this option, you spread out your payments over a specified term based on the amount owed. You’re not required to pay a large amount as a deposit, but there could be a user fee.

Offer in Compromise: With this option, you can settle with the IRS for less than the amount owed. Applying for an Offer in Compromise requires planning and strategy. The IRS assesses a person’s assets, liabilities, and income to determine if they are eligible for this option.

Partial Payment Installment Agreement: The Partial Payment Installment Agreement is applicable to individuals who owe significant back taxes and can afford to make payments but require more time than allowed in the ten-year period provided by the statute of limitations.

Currently Not Collectible: This phrase means the IRS cannot collect the debt from you within the ten-year period provided by the statute of limitations. The IRS determines eligibility by reviewing your sources of income and expenses, and if the remaining amount is not sufficient, then your account may be considered “currently not collectible.”

How do I qualify for each option?

To qualify for each of these four options mentioned, you must meet certain criteria.  Perhaps you’ve already applied for a payment plan but failed to pay timely. You may still qualify for a payment plan.  To qualify for settling with the IRS, you must submit current tax returns, and you must have made a deposit if applicable. For eligible taxpayers, settling with the IRS may reduce any penalties assessed. You could also be eligible for an Interest Abatement.

Conclusion: 

There are numerous reasons why a taxpayer may consider settling with the IRS. Seeking help in settling with the IRS is strongly recommended. At some point, everyone needs help in getting taxes resolved. Navigating the tax code can be tricky. Knowing what options exist and what’s involved in settling with the IRS can make all the difference to achieve the best possible outcome. If you’re unsure about where to start, consider consulting a qualified tax professional. They will guide you through the process and represent you before the IRS. Remember, solutions are available to help get you back on track to better financial health.