What is Tax Compromise?- Read a Tax Lawyer’s Explanation
When you find yourself in over your head with your tax debt, you may want to consider the concept of tax relief and settlement. The IRS offers a number of ways to get you to pay less, but the only settlement option is an offer in compromise (OIC). Through this process, you and the IRS agree to reduce the amount of money owed to the IRS. This is an excellent solution for many taxpayers who are unable to pay their tax obligations.
There are several types of tax relief settlement. One of the most complex is an offer in compromise, which allows a taxpayer to settle their taxes for less than they owe. These types of tax relief settlements can be complicated, but an experienced tax professional can handle the process. To get the most out of an offer in compromise, you must be able to prove that the collection agency had forcefully collected the money from you.
While the IRS does offer some types of abatement, the benefits of such a relief are limited. Only a few types of taxpayers can qualify for interest abatement. In addition, it is rare to get a penalty abatement from the IRS. A good tax settlement company will offer to negotiate penalties and interest for you, but you should be careful to avoid those companies who make claims that are simply too good to be true.
If you are able to pay a settlement with the IRS, you are regarded as in good standing with the IRS. While you may not be able to access all of your equity, you will still be able to pay your tax debt. The IRS considers this a resolution. You will be able to continue working with them and making the payments on time. So don’t hesitate to take advantage of the concept of tax relief and settlement and save yourself a lot of money.
The concept of tax relief and settlement differs from traditional debt relief. It’s important to understand the difference between the two. In a settlement, the taxpayer agrees to pay a lower amount than the amount owed to the IRS. This is the same as an agreement between the IRS and a taxpayer. Neither option is necessarily the best option for everyone. But in the case of a bankruptcy, the taxpayer has a choice between the two options.
In an Offer in Compromise, the IRS approves a settlement if the taxpayer can’t afford to pay their tax debt, said Virginia tax law attorney. If you’re eligible for an Offer in Compromise, you can pay less than what you owe. This option is the best choice if you cannot afford the full amount. The IRS doesn’t give its approval unless it’s clear that it can collect the money in a reasonable amount of time.