The airwaves are flooded with companies that pledge to help you settle your IRS debt for pennies on the dollar. While that may seem too good to be true, there is some truth to the fact that you can compromise with the IRS and pay less than you owe. The question is whether obtaining tax relief negotiation with the IRS is a wise move. Given the IRS’ reputation for hardball, in many cases, it is better.
One of the scary things about being on the receiving end of the IRS’ wrath is that the amount that
The IRS has the ability to hit you with penalties and interest. These make your tax liability grow and add to your debt to the IRS. Penalties and interest can add up in a hurry, leaving you with an insurmountable obligation that is impossible to pay in full.
However, as intimidating as the IRS is, it also has free tax tools and programs that recognize some of the realities that taxpayers are facing. The IRS understands that taxpayers may not be able to pay all of their debts in full and at once.
In addition, the IRS understands that sometimes it is better to be flexible and get paid some money than to hold the line and have to work hard to recover something from a taxpayer.
Finally, the fact that politicians have legislative oversight over the IRS means that there needs to be some mechanism for taxpayers to escape draconian enforcement given the political unpopularity of the IRS.
Finally, the fact that politicians have legislative oversight over the IRS means that there needs to be some mechanism for taxpayers to escape draconian enforcement given the political unpopularity of the IRS.
All of this adds up to a system in which people who understand the available programs and know how to deal with the IRS can help taxpayers receive relief on their taxes.
This does not mean that the taxpayer will escape their income tax liabilities completely. However, it does mean that there may either be some reduction in the
Depending on economic conditions, the IRS is continuously adding new programs under which taxpayers could receive tax relief or expanding existing programs. For example, in the Great Recession, the IRS recognized the struggle that taxpayers were facing and expanded the number of people who could qualify for the Offers in Compromise Program.
This particular program allows taxpayers to settle with the IRS for less than they owe. The IRS does this so that they will not have to undertake enforcement measures to get the money that it is owed. These enforcement measures can take years and the IRS looks bad when it has large amounts of taxes outstanding that it is owed.
However, not all taxpayers can qualify for the Offer in Compromise Program. In addition, it often takes some familiarity with the IRS to obtain the best possible repayment plan. Tax debt relief specialists frequently deal with the IRS and know the programs that are available for taxpayers.
They can help structure a compromise or a payment plan that is acceptable to the IRS. Tax resolution companies will know how to negotiate with the IRS and they are not paralyzed by fear as many people are when dealing with the scariest government agency there is in existence.
Some companies have a mix of former IRS agents and tax attorneys who know the system, which ultimately helps a taxpayer who needs expert assistance in navigating the IRS’ processes.
For whatever reason, the IRS wants taxpayers to be able to obtain a fresh start if necessary. While that does not mean that the agency will look the other way when you owe large amounts of taxes, it does mean that there is some ability to navigate the system to make your tax obligations more reasonable.