Having tax debt in the United States is problematic. The IRS leaves no stone unturned in collecting taxes, which can be fearsome, however, this rigidity is just one side of the story, the IRS also provides debt relief provisions (primarily under the Fresh Start Initiative/FSI) to encourage maximum tax deposits. These debt relief plans are approved only after taxpayers meet a stringent set of eligibility criteria, which is why it is advisable to consult a tax attorney in Dallas that can help you get the much-needed concession. But before that, it is crucial to understand the different debt relief plans available. That said, continue reading as we discuss various IRS debt relief plans that you should know.
Installment Agreement
An IRS tax installment agreement is a time-based concession that allows taxpayers to pay their dues over a period instead of a lump sum amount. The duration of a payment agreement varies depending on the tax due, it is arguably the most common FSI provision. Requesting an installment agreement requires the taxpayer(s) to comply with the eligibility criteria specified by the IRS, which can be overwhelming to understand. This is where it is beneficial to hire a debt attorney.
Offer in Compromise (OIC)
An OIC is a monetary concession, under the FSI, offered by the IRS to the taxpayers allowing them to settle the outstanding amount for less than what is owed. But, don’t be fooled, the IRS does not just let anyone walk off without paying the total amount, the IRS approves requests for OIC only in cases where the taxpayer is in no position to repay the full amount and agrees for a lower monthly payment offer. This requires proof of economic distress and ability to meet other stringent eligibility criteria, requiring an in-depth understanding of the same. This is where a Dallas tax attorney steps in to create a strong application starting from compiling intricate documents to drafting a request for OIC so that your chances of acceptance are more favorable.
Currently Non-Collectible Status
The Currently Non-collectible Status is a declaration of stay or hold put on your tax recovery case by the IRS. It is approved in conditions where the IRS judges that you cannot pay your tax dues and living expenses at the same time. This doesn’t affect the purpose of the IRS at all as they have a decade to collect the outstanding amount from the filing date as per the Statute of Limitations and they continue to conduct annual reviews to see whether your situation has changed. Requesting for a non-collectable status involves several intricacies, which is why it is advisable to contact tax attorneys in Dallas Tx to chart the best possible way.
Final Word
Seeking IRS debt forgiveness is all about presenting your case with the right documents at the earliest, however, given the intricacies involved, it is beneficial to hire a tax attorney who has knowledge of all debt relief plans including IRS penalty abatement. A good IRS attorney will not only suggest the best possible plan for you but also help formulate the application request for simplifying the tax repaying process.
