IRS Tax Negotiation For States
When the IRS or state revenue department agree to settle the tax liability through an IRS or state program, this is referred to as a tax settlement.
Tax settlement programs and their guidelines vary state by state. However, most have very stringent guidelines when submitting a tax settlement.
Basically tax settlements fall into 2 general categories:
1.The first is when the taxpayer may qualify to pay back less than the full amount owed and is unable to pay the full debt back immediately. This would include an Offer in Compromise, partial payment plan and abatement of penalties.
2.If the taxpayer does not qualify for a tax settlement for less than the amount owed, then there are two other options. One is a monthly payment plan, known as an installment agreement, is set up to pay back the tax debt over time. The other is usually due to an extenuating circumstance where the taxpayer cannot pay anything. this is called uncollectible status. It could be unemployment, family or medical condition. This is a temporary arrangement where the IRS or state stays collection action until the tax payer's financial situation changes. This will not eliminate the tax debt or stop interest from running.
Typically, a taxpayer who owes both the state and IRS tax liabilities, the state liability is usually less. An installment agreement will need to be set up with the state majority of the time.
However, there are many people who cannot pay the state in installment payments and still need help, typically this is a tax settlement that allows them to pay less than the full amount. Typically, this is done through an Offer in Compromise.
When the IRS or state revenue department agree to allow the taxpayer to pay less than the full amount owed, this is an Offer in Compromise.
The Offer in Compromise/tax settlement program is available in most states. When submitting an Offer in Compromise, most state agencies will require full financial disclosure and documentation.
States make their decision on whether to accept an Offer in Compromise on various factors. These typically include the taxpayer's income, expenses and assets. Other determining factors are medical condition, age and other things that created the tax debt.
State agencies will also look not only on the taxpayers current financial condition and circumstances but what could be collected in the future given the taxpayers age, employment, medical condition and any other extenuating circumstances.
3 - 12 months is the typical length of time to set up a tax settlement. It is important that the correct forms are filed and that the right substantiating information is submitted to avoid have the Offer returned.
An experienced tax representative should be able to help with evaluating whether a taxpayer would actually qualify for an IRS tax settlement [http://www.cktax.com/irs-tax-settlement.html] or state tax settlement [http://www.cktax.com/irs-tax-settlement.html]. They will assure the correct forms and documentation are submitted and that the lowest possible amount is settled on.
Tax settlement programs and their guidelines vary state by state. However, most have very stringent guidelines when submitting a tax settlement.
Basically tax settlements fall into 2 general categories:
1.The first is when the taxpayer may qualify to pay back less than the full amount owed and is unable to pay the full debt back immediately. This would include an Offer in Compromise, partial payment plan and abatement of penalties.
2.If the taxpayer does not qualify for a tax settlement for less than the amount owed, then there are two other options. One is a monthly payment plan, known as an installment agreement, is set up to pay back the tax debt over time. The other is usually due to an extenuating circumstance where the taxpayer cannot pay anything. this is called uncollectible status. It could be unemployment, family or medical condition. This is a temporary arrangement where the IRS or state stays collection action until the tax payer's financial situation changes. This will not eliminate the tax debt or stop interest from running.
Typically, a taxpayer who owes both the state and IRS tax liabilities, the state liability is usually less. An installment agreement will need to be set up with the state majority of the time.
However, there are many people who cannot pay the state in installment payments and still need help, typically this is a tax settlement that allows them to pay less than the full amount. Typically, this is done through an Offer in Compromise.
When the IRS or state revenue department agree to allow the taxpayer to pay less than the full amount owed, this is an Offer in Compromise.
The Offer in Compromise/tax settlement program is available in most states. When submitting an Offer in Compromise, most state agencies will require full financial disclosure and documentation.
States make their decision on whether to accept an Offer in Compromise on various factors. These typically include the taxpayer's income, expenses and assets. Other determining factors are medical condition, age and other things that created the tax debt.
State agencies will also look not only on the taxpayers current financial condition and circumstances but what could be collected in the future given the taxpayers age, employment, medical condition and any other extenuating circumstances.
3 - 12 months is the typical length of time to set up a tax settlement. It is important that the correct forms are filed and that the right substantiating information is submitted to avoid have the Offer returned.
An experienced tax representative should be able to help with evaluating whether a taxpayer would actually qualify for an IRS tax settlement [http://www.cktax.com/irs-tax-settlement.html] or state tax settlement [http://www.cktax.com/irs-tax-settlement.html]. They will assure the correct forms and documentation are submitted and that the lowest possible amount is settled on.
