There are a great many ways to overcome a debt with the IRS. All of them are legal and if you find the right organization to assist you, you’re going to find it’s an easy and affordable process. First things first; you need to know how you may be eligible for programs the IRS offers to debtors, in order to overcome those debts.
There are two main avenues you can pursue in order to eliminate your debts without breaking the bank. One of them is the Offer in Compromise. The Offer in Compromise program is available to any citizen but is mainly reserved for the elderly, people that have disabilities, or those who can provide proof of extenuating circumstances.
Let’s take a look at some of the things that may give you an out in this program. Starting with doubt as to collectability may be a good route, if you can provide the information that supports your claim. The collection potential of a taxpayer is determined by their assets plus the amount the IRS might collect from any source of future potential income. If the IRS can determine that you have the ability to pay the liability in full, whether it be immediate or through a payment plan, otherwise called an Installment Agreement, they will not accept an Offer in Compromise. If you can provide proof that paying the debt in full would jeopardize your ability to provide for your family, that you could not possibly pay the amount in the years ahead of you, or that there are other extenuating circumstances that impede your ability to pay such as medical issues like serious or terminal illness in the family, you will be granted an Offer in compromise.
Another avenue of pursuit would be the Penalty Abatement Program. This is very advantageous for many people looking to overcome their IRS tax debt with ease. It can be the right program for you if you are able to pay for the tax liability but believe that the penalties should be waived. If you can demonstrate specific reasons as to why you were not able to pay the principle and should not be responsible for the penalties, you will be granted an abatement. Here are some of the reasons that would qualify you:
• If you had major family issues such as a divorce
• If there was a theft of destruction of your financial records
• Any major illness
• If you were incarcerated
• Any major disruption to your life, such as being deployed
• If your family was victim to any major natural disaster, such as a hurricane, flood, or fire
• If you or your spouse had been unemployed for a lengthy amount of time
• Death of a close family member
• If you were involved in a Civil Disturbance such as court trial or tribunal
• If you can provide proof that you were physically unavailable to incur the penalties; meaning you were out of the country during any portion of the taxable year and made less than $90,000 during that year
In order to qualify for either of these programs, you will need to send a written petition explaining your circumstances in a few paragraphs. You may also request an oral interview and state why you qualify for an Offer in Compromise or a Penalty Abatement. Be sure to provide as much information as possible and don’t be afraid to provide too much documentation; the more information you can provide in hard copy, the better your chances of being granted either settlement.