An important part of tax debt planning is researching ways to minimize the overall tax amount with the various IRS programs, where they can save more of their money from falling into the hands of the IRS.
Offer in Compromise
Nicknamed by fraudulent tax companies as "pennies on the dollar," an Offer in Compromise allows taxpayers to reduce their tax debt substantially. However, not all taxpayers will qualify for this payment plan because of its strict qualifying factors.
Partial Payment Installment Agreement
This IRS debt payment plan allows taxpayers to pay a reduced tax debt amount in monthly payments. The IRS primarily considers the taxpayer's ability to pay their tax debt before qualifying them for Partial Payment Installment Agreement payment plan.
Taxpayers who do not meet the qualifying guidelines of tax debt reduction payment plans may explore a Penalty Abatement. It allows taxpayers to pay reduced or no penalties on their tax debt, resulting in a much reduced amount of total tax debt. Before applying for a Penalty Abatement, taxpayers should explore their reason for non-compliance, which is of prime importance in getting approved by the IRS.
Selecting Tax Resolution Services
The promise of substantial tax debt reduction has led many taxpayers to hire fraudulent tax resolution services. To improve their chances for the best resolution, legitimate tax professionals should be hired to competently resolve the case.
Even if a fair tax resolution service is not able to achieve a reduction in tax debt, it will not extract more money from the client for its services. An honest tax professional goes a long way in saving money, effort, and time in the resolution of a tax case, which is ultimately of the greatest value.
Labels: Back Taxes, Installment Agreement, IRS, Offer in Compromise, Penalty Abatement, Taxpayers