Another tax relief option is available through what is called a compromise offer. This allows you to settle your back taxes with the IRS for less than you owe. According to the IRS, it may be an option if you can't pay your tax debt at all, or if doing so creates financial hardship. However, it's much more difficult to get the IRS to approve a compromise offer than a payment plan.
The IRS accepts less than half of the applications. You should explore other options before resorting to a compromise offer. To determine if you qualify for tax relief through a compromise offer, the IRS considers your ability to pay, your income and expenses, and your amount of assets. You may have to pay a down payment to the company for tax relief, and it may be a percentage of the taxes you owe.
That fee could be higher than what you would end up saving on your tax bill if the IRS accepts your offer in a transient manner (and it may not be refundable if the IRS rejects your offer). Check if you are eligible to receive a commitment offer. You can use the IRS's online prequalification tool to see if a compromise offer might be right for you. Remember that the tool is just the beginning of the process you'll still need to complete a formal request.
Property and accident insurance services are offered through NerdWallet Insurance Services, Inc. OK9203 Property & Casualty Licenses. Sometimes, the IRS will consider reaching an agreement that will allow you to pay a reduced amount of what you owe in back taxes, which is called an offer of commitment. You must convince the IRS that you cannot pay what you owe and offer to pay the reduced amount in a lump sum or in short-term installments.
If you have a complex and challenging tax relief case, you can expect to pay on the higher end of the spectrum. However, this method is often stressful and time consuming, and if you're struggling with debts and taxes due, the last thing you need is more stress. Most tax relief companies will indicate your minimum level of debt requirement on their website or will review it during the free consultation to determine if you qualify for state or federal tax relief. If you meet the criteria for indebtedness and have filed your tax returns in the past, the IRS will use a formula to calculate your monthly payment.
Anthem Tax Services has one of the lowest discovery retention mechanisms in the industry, making its tax solutions accessible to everyone. The best tax relief companies are the ones that understand your situation, find a suitable program, and then negotiate with the IRS on your behalf. The IRS Office of Professional Responsibility focuses on questionable practices in the tax debt resolution industry. Since no reputable tax relief company will claim to get rid of all debt, it is likely that they will only receive a small amount of debt relief.
Very few tax relief companies disclose their costs in advance, and you'll need to schedule a free consultation to get an estimate of what they'll charge you. Tax relief companies use radio, television, and the Internet to advertise aid to struggling taxpayers. Working with an accredited tax relief company can dramatically reduce the stress and financial burden of unpaid taxes, but that relief comes at a cost. But don't delay; you only have three years from the due date of the original tax return to request refunds of old taxes.
In general terms, any type of measure, provision, or incentive that helps taxpayers to legally minimize or reduce their tax liabilities can be considered a tax relief in terms of policy. However, the IRS works with taxpayers on an individual basis, so that one person's burden of tax debt could be completely waived, while another could be asked to pay off their debt in full. The tax relief solution that is currently not collectible is a deferment of payment that you can get if you can prove that you don't have the funds needed to pay your debt to the IRS.