Currently Not Collectible
Let’s be honest with the fact that life sometimes just gets in the way. For taxpayers who have no income, no job, and no assets, the currently not collectible pathway may be a resolution option for you. While placed in currently not collectible status, the IRS cannot enforce any collection actions and no payments must be made by the taxpayer despite any accrual of penalties and interest. Best of all, the tax debt is forgiven after 10 years.
Offer in Compromise
The Offer in Compromise resolution option is the government’s “Let’s Make A Deal” program that allows you to settle your entire tax debt including penalties and interest for less than you owe. The Offer in Compromise essentially wipes the slate clean, allowing the taxpayer to start fresh once again on the right foot. The IRS Code states: “We will accept an Offer in Compromise when it is unlikely that we can collect the full amount owed and the amount you offer reasonably reflects the collection potential…” (Internal Revenue Code §7122).
Installment Agreement
The installment agreement resolution option is the government’s payment plan option that allows the taxpayer easy and affordable monthly payments on your tax liability. The agreement keeps the IRS or the state from levying if the payments are paid as agreed. Without an installment agreement, the IRS or state may take all but a small amount of your paycheck. They can also levy bank accounts and file liens on all of your assets including your home. We may be able to combine an Installment Agreement with a Penalty Abatement to save money and get time to pay the rest.
Innocent Spouse
The innocent spouse option allows a spouse to be relieved from tax debts owed due to misdeeds or fraud committed by another spouse.
This tax problem resolution is based on a two-part set of rules encompassing Innocent Spouse, Separation of Liability, and Equitable Relief. The appropriate portion of the solution depends on each taxpayer’s situation. Considerations include whether the spouses are still together, whether there is an understatement or underpayment on the joint tax returns filed, and other factors that can affect mitigation.
Penalty Abatement
The IRS and state both increase the taxpayer’s tax liability by pyramiding penalties and interest to the unpaid tax. In many cases, a taxpayer could pay the tax, but thanks to the penalties and interest, the ballooning balance quickly becomes unmanageable. Penalties and interest might be reduced or eliminated if you can demonstrate reasonable cause and prudent action. Further, we may be able to couple Penalty Abatement with an Installment Agreement and get you back on track!
