Yes, if your circumstances fit. The IRS has the authority to cancel all or part of your tax debt and to settle with you for less than you owe. This is called a commitment offer or OIC. A compromise offer is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount due.
A compromise offer is an option when a taxpayer cannot pay all of their tax liability. It's also an option when paying the full tax bill could cause financial difficulties for the taxpayer. The goal is to reach a compromise that fits the interests of both the taxpayer and the agency. Sometimes, the IRS will consider reaching an agreement that allows you to pay a reduced amount of what you owe in back taxes, which is called a commitment offer.
You must convince the IRS that you cannot pay what you owe and offer to pay the reduced amount in a lump sum or in short-term installments. Before you submit your offer, you must (file) all the tax returns that you are legally required to file, (make all the estimated tax payments required for the current year) and (make all the federal tax deposits required for the current quarter) if you own a business with employees. One is to have a tax relief professional negotiate with the IRS a possible reduction in total tax debt. This option must be prepared for the IRS to take advantage of all its legal tactics to collect during that period.
Depending on your needs, Landmark Tax Group can help you determine the exact due date of your IRS collection statute, check the status of your case with the IRS, determine a plan to resolve your IRS collection case, and more. If paying off the debt immediately isn't a viable option, taxpayers can set up an installment plan with the IRS for up to 72 months to address the problem. A large amount of debts to the IRS can be a crushing burden, but the worst thing you can do is ignore the problem. While you may have seen television commercials that suggest that paying the IRS cents for every dollar can be easily achieved, such ads are misleading.
Installment plans are like mortgage mortgages, but instead of paying a lender every month, you pay the IRS every month. Fortunately, if you've already begun to see some of these consequences, contracting a payment plan with the IRS could help reduce (or even cancel them completely). A second alternative is to apply for a loan from a qualified pension plan, such as a 401 (k) plan or an individual retirement account that you can pay back over time. You can use the commitment offer prequalifier on the IRS website to determine if you are eligible and prepare a preliminary proposal.
The IRS will continue to impose penalties and charge interest on unpaid tax balances until they are settled. If your dispute with the IRS is complicated and the amount of back taxes, interest and penalties is high, it might be better. When evaluating your application, the IRS will consider your net worth and sources of credit, such as credit cards and home equity lines of credit. Fortunately, most tax relief professionals, such as Landmark Tax Group, provide confidential consultations before full representation.
During the application process, the IRS may also request additional documentation, such as bank statements or other financial documents, to show that you cannot pay more.
