Things to Consider Before Accepting an IRS Back Tax Settlement

A back tax settlement is a form of a financial agreement that allows individuals to pay off their taxes in a manner that is more affordable and manageable than the IRS would otherwise accept. This can be especially beneficial for individuals who are unable to make payments on their own. If you have been contacted by the IRS with a request for a back tax settlement, here are some things to consider before you decide to accept the offer.

Payment Plan

When you owe taxes to the IRS, it can be hard to get a settlement. However, the IRS offers several options that will help you pay back your debt.

The first option is a payment plan with the IRS back tax settlement. This will let you spread out your tax debt over time.

You can apply for a payment plan online or by mail. Before you apply, you should check out your budget. Also, you should be able to meet the requirements of the plan. Depending on your situation, you can choose between a short-term or long-term payment plan.

A short-term payment plan is ideal for those who owe less than $100,000. To qualify, you must have less than that amount in combined taxes. Those who owe more can use a direct debit installment agreement.

Offer in Compromise

Offer in compromise is a tax laws in Brooklyn settlement technique whereby a taxpayer and the IRS agree to settle a tax bill for a fraction of the amount owed. The offer is designed to help those with severe financial hardship.

It is not the best solution for everyone, but it can be a relief for many taxpayers. You should check with your tax professional or tax attorney before making an offer. If you are unsure whether you qualify, you should use an online pre-qualifier tool to determine the offer in compromise that is right for you.

The offer in compromise process can take between 7 and 12 months. This is because the Department of Treasury will want to review the information you have submitted. They may rescind the offer if they find additional information that could change their mind.

Separation Of Liability Relief

When it comes to relief from the IRS, there are a number of options to choose from. These include innocent spouse relief, separation of liability relief and equitable relief. In some cases, a settlement may even be considered.

The best way to get relief from the IRS is to file a claim. You must make your case to the IRS in a timely manner. If you fail to make a timely claim, you might not be eligible for relief.

Relief by separation of liability is a tax relief program designed to allow the IRS to allocate your tax liability among you and your ex-spouse. Generally, you will be refunded for your share of the liability but will not receive a refund for taxes already paid.

Statue of Limitations

The Internal Revenue Service has a statute of limitations for collecting back taxes. This statute of limitations enables the IRS to collect on your tax debt up to ten years from the date of assessment. However, a number of situations can toll the statute.

If you’re not sure how to handle a tax debt, consult a tax professional. They can help you identify the best possible tax relief option for your situation.

Generally speaking, the statute of limitations on collections is five years, although the IRS can extend this deadline in some cases. For example, if you are filing for innocent spouse relief, the statute of limitations is suspended until 90 days from the day the decision of the petitioning tax court becomes final.

Common IRS Back Tax Settlement Scams

Tax relief scams are a type of fraudulent activity that uses various forms of methods to target taxpayers. Often, these scams target people who have tax liens, but it is not limited to this particular category.

Scammers will contact you through phone, email or text. They may pose as the IRS, a computer problem or a long-lost relative. Then, they tell you to go to a certain website or make a certain payment to receive your refund. Later, they ask for personal information, such as your social security number or gift card access numbers.

You should never give any personal information over the phone to a stranger. Instead, use a unique username and password, and update it annually. Regardless of your situation, you should always report suspicious contacts to the IRS.