Resolving IRS tax problems alone can be a very difficult task to complete. Although the IRS offers programs to help settle IRS tax problems, most of these programs require massive amounts of forms and full financial disclosures that are often impossible for a taxpayer to complete on their own. Often times it is a taxpayers best bet to get help from an experienced tax lawyer or CPA to help ensure they get the best possible relief to their IRS tax problems. The IRS offers several programs for helping taxpayers with back taxes including the Offer in Compromise, Currently Not Collectible Status, and Installment Agreements.
The first program the IRS offers for resolving IRS tax problems is the Offer in Compromise. An Offer in Compromise is a form of IRS back tax resolution. It requires a disclosure of extensive financial information in order to prove to the IRS that they would not be able to collect the full amount of back taxes. The Offer in Compromise requires a taxpayer to prove that the IRS could not collect the full back tax liability over four or five years even if the IRS forced the sale of all assets currently own. The IRS is only willing to accept an Offer in Compromise once a taxpayer has filed all of his or her necessary federal income tax returns.
Another program offered by the IRS is placement on Currently Not Collectible status, which will essentially end all collection activity from the IRS for an IRS tax problem. To be placed on Currently Not Collectible status, taxpayers need to prove to the IRS that necessary monthly living expenses exceed their monthly income. Thus, Currently Not Collectible status will require a full disclosure of financial information. The IRS is typically only willing to place a taxpayer into Currently Not Collectible status once the taxpayer has filed all of his or her necessary federal income tax returns.
The IRS also offers Installment Agreements, which is a monthly payment plan to the IRS based upon how much a taxpayer owes and how much they can afford to pay. To establish an Installment Agreement with the IRS, it might require a disclosure of a taxpayer’s financial information. The IRS is only willing to enter into an Installment Agreement once a taxpayer has filed all of his or her necessary federal income tax returns.