Relief from Tax Debt using Offer in Compromise
Last updated on October 11, 2022
Tax debt relief can be achieved through tax debt reduction. Those taxpayers that cannot afford to pay their full back tax debt may consider applying for tax debt reduction plans of the IRS. It must be remembered that it is only those who are in serious financial hardship and are barely able to meet basic living expenses that can achieve the tax debt reduction.
Offer in Compromise is a popular IRS tax debt reduction plan. It allows taxpayers to get a reduction in tax debt so that they can comfortably pay the remaining amount and resolve their tax case. This payment plan has strict qualifying factors.
Before qualifying taxpayers for Offer in Compromise, the IRS reviews their financial capacity, including all income sources and assets, to determine the amount of back tax they can pay. After the review, the IRS may choose to accept or reject a request for Offer in Compromise.
Taxpayers must remember that they should only apply for a tax debt reduction plan that they can hope to qualify for. Every tax debt payment plan has qualifying restrictions. The IRS charges a penalty in cases where taxpayers apply for payment plans when they do not meet even the basic qualifying factors. Therefore, taxpayers should only choose to apply for a payment plan that they can qualify for.
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