Tax lawyers can make IRS debt forgiveness more accessible for you. Legal representation is extremely important during an IRS audit, especially if you want to pursue debt forgiveness. A tax lawyer can defend a taxpayer’s interests while also helping you apply for relief or forgiveness programs.
What is IRS Debt Forgiveness?
IRS debt forgiveness is a program that offers multiple tax relief options for taxpayers who are struggling to pay their taxes. Many American taxpayers owe the IRS back taxes, often many years of back taxes. Owing taxes to the IRS can be overwhelming and stressful, especially for taxpayers who need help understanding the tax laws and regulations. If your taxes go unpaid, the IRS can garnish your wages, levy your bank accounts, or place tax liens on your properties.
Qualifications for IRS Debt Forgiveness
A tax lawyer can help you determine if you qualify for the IRS debt forgiveness program, but ultimately, the IRS determines if a taxpayer qualifies for debt forgiveness. Typically, the IRS agency qualifies individual taxpayers who owe a total tax debt balance of $50,000 or less with a total income below $100,000. The taxpayer must claim to be in extreme financial hardship and have all previous tax returns filed. A tax lawyer can help you find all your owed taxes, determine if you can qualify for debt forgiveness, negotiate with the IRS, and help you file your tax returns.
Each debt forgiveness case is handled individually by the IRS. Since each taxpayer is judged on a case-by-case basis, working with experienced tax lawyers is critical. Without the help of a tax professional, you may end up paying more than you have to. Get the best outcome for your tax resolution with a tax lawyer who knows how to negotiate with the IRS.
Tax Relief: How it Works
The IRS Debt Forgiveness program allows taxpayers to consolidate all of their debts into one monthly payment, making it easier to manage the debt. A professional tax lawyer can help you decide which debt settlement and repayment option is best for your financial situation. There are a few ways to get tax relief with the help of a tax lawyer.
Offer in Compromise (OIC)
An offer in compromise is an option for taxpayers to settle their IRS debt for less than what is owed. A professional tax lawyer can help you set this offer up and negotiate with the IRS in your favor. Typically, the IRS will accept the offer in compromise request if there is a doubt that the tax debt will ever be collected, if the amount offered to pay back is the most that can be collected given the ability to pay, or if collecting the full amount of tax debt would create financial hardship for the taxpayer.
If the IRS accepts the offer in compromise, the taxpayer will be expected to pay a non-refundable deposit. The amount of this deposit depends on the payment method the taxpayer chose with the help of their tax lawyer. The offer in compromise can be paid with a lump sum of cash in the entire amount of the offer with one payment. A short-term payment plan, typically five or fewer payments, may be implemented by the IRS if your tax lawyer negotiates for that plan. You may also be placed in a deferred payment plan, typically more than five payments. All of these plans will require the tax offer amount to be fully paid off by the end of the agreement.
Currently Non-Collectible Status
A currently non-collectible status means you can’t pay your taxes, and the IRS has placed you in this status. While in this status, the IRS will not actively pursue the owed tax money from you. But this doesn’t mean your debt is forgiven; interest and penalties will continue to accrue.
If you are in currently non-collectible status, the IRS may require you to file a financial statement to show your current income and expenses. The IRS will use this statement to determine when they can start collecting taxes from you again. A tax lawyer can help you write the financial statement for the IRS and negotiate with them if they try to collect too early.
IRS Installment Payment Plans
An installment agreement is an IRS payment plan that allows a taxpayer to pay back their debt over time. Installment agreements are a good option for taxpayers who can’t pay their taxes back in full or have many years of back taxes. IRS installment payment plans still accrue interest and penalties over time, so making your payments on time is critical.
A tax lawyer can help you by negotiating a fair payment plan for your financial situation. If a taxpayer doesn’t abide by the installment plan terms, the IRS may revoke the agreement. A tax lawyer can help you understand your payment plan’s terms and can help you set up a financial plan for your future.
The IRS Doesn’t Provide Guarantees
Tax laws and regulations are complicated and confusing for most taxpayers. If you try to set up your own IRS debt forgiveness program, the IRS may end up rejecting it. A tax lawyer can ensure that everything you need for approval into the program is met. There are no guarantees when it comes to the IRS; don’t let your debt forgiveness plan get rejected. It makes the most sense for taxpayers to work with a tax lawyer who is experienced in getting IRS debt forgiveness plans approved, hire a tax expert today!
