If you are overwhelmed by your tax debt and cannot afford to pay off what you owe to the IRS without putting yourself in significant financial hardship, investing in tax settlement services may help you resolve your tax situation and save money overall.
TABLE OF CONTENTS
- Tax settlement services that are offered by tax relief companies allow taxpayers to lower their tax liability when their financial circumstances prevent them from being able to reasonably afford to pay their tax bills.
- The IRS offers debt forgiveness programs, such as offers in compromise, installment agreements, currently non-collectible status, and penalty abatements, that allow taxpayers to resolve their tax problems by lowering their tax bill to an amount that they can afford to pay.
- Hiring professionals for tax settlement services can ensure that taxpayers achieve maximum savings involving their tax settlements.
What Are Tax Settlement Services?
Tax settlement services are provided by tax relief firms to help struggling taxpayers reduce their tax liability when they cannot afford to pay their full tax balance. Eligible taxpayers may qualify for a tax settlement, in which the IRS or a collection agency allows them to settle their tax debt for less than what is initially owed.
IRS Debt Forgiveness Programs
IRS forgiveness programs, such as offers in compromise, installment agreements, currently non-collectible status, and penalty abatement, can help taxpayers who cannot afford to pay what they owe in back taxes or may even be facing wage garnishments, tax liens, or levies.
Offers In Compromise (OIC)
An offer in compromise is a form of IRS debt relief, allowing eligible taxpayers to settle their tax liability for less than what was initially owed during situations in which paying off their full tax bill would result in them struggling to afford their basic living expenses.
An installment agreement permits eligible taxpayers to make monthly installments to gradually pay back their tax debts. This form of tax relief can be extremely helpful for people who cannot afford to pay their tax liability without undergoing extreme financial hardship as it allows them to pay back their taxes owed in a manageable payment schedule instead of submitting payment for the full balance in one lump sum.
Currently Non-Collectible Status
Currently non-collectible status can temporarily delay the IRS collection process for taxpayers who meet the eligibility requirement for this form of tax relief, allowing them time to improve their financial situation before making payments toward their tax debt.
Penalty abatement can relieve taxpayers of tax penalties, which can be significantly impactful in reducing the money they owe to the IRS, even if it doesn’t directly lower their tax liability,
Why Should I Use Tax Settlement Companies To Find Tax Relief?
While it is possible for taxpayers to find success in negotiating with the IRS directly when attempting to settle their tax debt, seeking professional tax help from tax settlement firms that are experienced in providing assistance in lowering the tax liability for a variety of tax situations can help clients optimize their tax relief options, resulting in a lowered tax liability or, in some cases, a tax refund.
When individuals fail to pay their tax bills on time, the IRS may seek other collection strategies, such as tax liens, levies, and wage garnishments, to secure payments, but if you find yourself in this situation, there are ways to stop the collections from creditors and settle your tax debts.