The IRS recognizes the struggles that taxpayers face when overcoming their tax liability. To help, the IRS developed debt forgiveness plans. If you are a Seattle taxpayer, here are two options to explore if you are facing back taxes:
The IRS introduced the Fresh Start Program and Installment Agreement options to taxpayers burdened by back taxes. The programs were designed to allow taxpayers to pay their liability over time in monthly payments.
The IRS’s Fresh Start Program offers various types of Installment Agreements based on what you owe. The following are the different types of installment agreements:
Less than $25,000 – Taxpayers who owe the IRS less than $25,000.00 may be eligible for a streamlined installment agreement with five-year payment terms.
Less than $50,000 – Individuals with a tax debt of less than $50,000 can negotiate a payment plan with the IRS where monthly payments are automatically deducted from their accounts. This Installment Agreement typically lasts for five years.
More than $50,000 – A financial statement is required for taxpayers who owe more than $50,000 to the IRS. In an Installment Agreement, the IRS bases its calculations on National Standards, which are used to calculate repayment of delinquent taxes and determine what the taxpayer should be paying for necessary expenses such as food, housing, clothing, etc.
Business owes $25,000 or less -The IRS can grant an in-business Trust Fund Express Installment Agreement for companies owing less than $25,000 in payroll taxes. The unpaid taxes must be paid in full within 24 months.
Business owes more than $25,000 – If your business owes more than $25,000, the IRS will demand the filing of a financial statement and review your business’s ability to make payments under an Installment Agreement. The IRS may also assess the TFRP against the business employees responsible for collecting, accounting, and paying trust fund taxes.
Offer in Compromise – The IRS allows taxpayers to settle their tax debt for less than the total amount owed. To be considered for the Offer in Compromise program, the IRS will consider the taxpayer’s ability to pay, income, expenses, and asset equity. Essentially, an IRS Offer in Compromise allows the taxpayer to cut a deal and compromise to pay what they can.
We negotiate with the IRS for our Seattle clients with convenient IRS back tax forgiveness plans. If you owe money to the IRS but cannot pay it all right away, IRS Trouble Solvers™ can determine if an Installment Agreement is right for you and help you negotiate the most affordable payment plan. We can also determine if an Offer in Compromise is the better option for you by performing a thorough financial analysis.
Contact us at 206-970-4477 and let us help you with your tax problems. Talk with a Tax Resolution Expert today.