SETTLE BACK TAXES
Take the First Step Toward Tax Relief!
The IRS reports billions of dollars in enforced collections revenue each and every year. We can now expect that total to increase as the IRS has announced its initiative for stricter compliance enforcement. These facts confirm the notion that the IRS is a relentless creditor who will act to collect on an unpaid tax debt through the use of severe measures. If you are an individual or business in need of assistance with a tax debt, then look no further - Tax Muscle is here to help.
Interest and penalties applied to an unpaid tax balance can cause an already large tax debt to spiral completely out of control. There is an assortment of reasons why taxpayers fall behind on their tax obligations, such as loss of employment, divorce, and physical illness, just to name a few. Self-employed persons and small business owners may knowingly or unknowingly fail to comply with their payroll tax obligations, which can quickly compound once the Trust Fund Recovery Penalty and interest are added.
Several fallacies exist in the context of confronting tax problems. Some people believe that stepping forward to admit a tax problem will create an even greater problem. Others believe that investigating a potential tax problem will reveal a bigger tax debt than they initially envisioned. Further yet, some people believe that they can ignore a tax problem in the hopes that the IRS will conveniently look away. It should go without saying that these are not shrewd positions to adopt. The mere contemplation of such erroneous beliefs may very well mark the beginning of a far more serious tax problem.
Dealing with tax problems is never fun, but the worst mistake you can make when facing a tax problem is to do nothing. Fortunately, there are several available tax resolution options that you can pursue to settle your tax debt for less than the amount that you actually owe, and Tax Muscle specializes in the facilitation of all of them. Freedom from tax debt is only a phone call away. Call Tax Muscle today and let our years of knowledge and experience help you lift away your tax debt burden for good.
Tax Debt Settlement Options:
Offer in Compromise (OIC)
An OIC allows you to settle your tax debt for less than the full amount that you owe. It may be a legitimate option if you either cannot pay your full tax liability or doing so would create a financial hardship. The IRS will generally approve an offer in compromise when the amount offered represents the most that they can expect to collect within a reasonable period of time (usually 5-24 months). Although it requires a lengthy and onerous process, the approval of an OIC is an immensely beneficial tax resolution. When making its determination on your OIC, the IRS will consider the following set of unique facts and circumstances: Ability to pay; Income; Expenses; and Asset equity. Our task is to compile a thorough financial analysis on you to determine the exact amount to offer the IRS in order for your OIC to be approved.
An Installment Agreement allows you to pay your full debt in smaller, more manageable amounts. Installment Agreements generally require equal monthly payments. The amount of your installment payments and the number you make will be based on the amount that you owe and your ability to pay that amount within the time that the IRS can legally collect payment from you. There are various types of installment agreements:
Streamlined Installment Agreement (SIA)
A taxpayer may enter into an SIA when they have a balance due of less than $50,000 and can fully pay their debt within 72 months or prior to the Collection Statute Expiration Date, whichever is earlier. This type of agreement generally does not require a financial statement, but a limited amount of financial information may be required in the application process. Taxpayers who qualify for an SIA must be compliant with all filing and payment requirements, and those with a balance of $25,001 to $50,000 must also enroll in a Direct Debit Installment Agreement.
Conditional Expense IA
This type of agreement can be used when a taxpayer has expenses that fall outside the scope of what the IRS typically allows, but is still able to fully pay the liability plus projected accruals within five years. If the liability plus accruals can be paid within five years, the IRS may deem it appropriate to allow the taxpayer the conditional expenses. If the taxpayer cannot pay within five years, the IRS may still deem it appropriate to allow the taxpayer the conditional expenses for up to one year in order to modify or eliminate the expense. A financial statement is required for this type of agreement so that the taxpayer can provide proof of their conditional expenses.
A stair-step installment agreement is a 60 month payment arrangement whereby the taxpayer makes a lower fixed payment for a period of 12 months before stepping up to a higher payment for the remaining 48 months of the agreement. The taxpayer is required to fully pay the tax debt within this 60 month period. Stair-step installment agreements are typically used when the taxpayer is close to paying off an expense such as a car loan, mortgage, medical bill, student loan, etc.
Traditional Installment Agreement
The Traditional Installment Agreement is a full pay arrangement requiring the taxpayer to pay as much as possible, as dictated by the facts and circumstances represented in the financial statements of the taxpayer.
Partial Pay Installment Agreement (PPIA)
Implemented in 2005, the Partial Payment Installment Agreement (PPIA) allows the IRS to enter into installment agreements that result in only partial payment of the tax liability. Prior to the enactment of this legislation, taxpayers could only enter into an agreement with the IRS if it resulted in full payment of the liability. This type of agreement can offer savings comparable to the OIC; however, the taxpayer must remain on the installment agreement until the collection statute expires. Taxpayers who are being considered for a PPIA must provide complete and accurate financial information that will be reviewed and verified. Taxpayers will also be required to address equity in assets that can be utilized to reduce or fully pay the amount of the outstanding liability. In addition, taxpayers granted PPIA's will be subject to a subsequent financial review every two years. As a result of this review, the amount of the installment payments could increase or the agreement could be terminated if the taxpayer's financial condition improves.
Currently Not Collectible (CNC)
Proposal of Currently Not Collectible (CNC) status is a tax resolution method used to prevent the IRS from employing any forceful collection action against a taxpayer. In order to qualify for CNC status, the taxpayer must supply complete financial disclosure to the IRS, and if such disclosure substantiates that the taxpayer's allowable monthly expenses exceed their monthly gross income, then the IRS will conclude that the taxpayer is suffering an economic hardship. Assuming that the taxpayer stays in compliance and that their income remains at the same level as when the CNC proposal was initially approved, the taxpayer can remain in CNC status until the expiration of the collection statute.
Penalty Abatement (PA)
We can successfully petition the IRS to alleviate a portion of the penalties assessed against you if we can demonstrate the following two essential elements: 1) reasonable cause for the noncompliance, and 2) due diligence on your part to resolve the tax debt. A proposal for penalty abatement requests that the IRS eliminate the failure to file and failure to pay penalties from your tax account. In order to reconstruct the conditions behind which they were assessed against you, we will formulate a detailed petition in our request for abatement of your penalties.
Negotiating with the IRS on the settlement of your back tax debt can be a daunting proposition. The complexity of the Internal Revenue Code is nothing short of astonishing. If you are facing a serious tax problem, you can trust that the experts at Tax Muscle will work vigorously to ensure you an affordable and favorable tax resolution. Our experienced team of tax professionals will examine your tax problem, apprise you of your resolution options, and facilitate the resolution plan that offers you the greatest benefit.
Every Taxpayer Has A Right To Tax Representation
If you have been contacted by the IRS or State Taxing Agency, or are facing enforced collection action or the threat of such action, then let Tax Muscle do the heavy lifting and resolve your tax problem for good. Call 855.829.6875 today for your free 15 minute tax debt consultation.