Can you settle back taxes? Owing Back taxes can be a dark cloud looming over your life. The letters keep coming and your fears can steadily grow. But there is hope! You, as a United States taxpayer have options to get rid of that looming cloud and thrust yourself into freedom.
The most basic of your options is the Installment Agreement. An Installment Agreement is a stoic way of saying a payment arrangement with the IRS. If you owe less than $25000: You pay a small setup fee(under $100) and agree to pay the IRS X amount of dollars a month until the back taxes are paid off. This can be done simply over the phone or on www.irs.gov! If you owe over $25000, things get a bit stickier. You must file a special form called a 433-F, which documents all of your income and expenses in the past three months to determine how much you can afford a month. This can be a complicated process, but luckily CLG Professional Services specializes in preparation of this form, and can lift much of this burden off of your shoulders.
Another solution for your back taxes is the Currently Not Collectible Status, or Status 53. This also requires a tabulation of income and expenses, but can temporarily suspend the collections process due to your inability to pay. This is periodically reviewed and can be periodically extended, but for some taxpayers a couple of months or even a year is all they need to get back on their feet and work towards paying off their back tax debt. CLG Professional Services has also helped its clients achieve a status 53, and can help you!
The last common help for back taxes comes in the form of an Offer in Compromise. This is arguably one of the most rejected options. Its rejection usually stems from two problems: 1. The taxpayer prepares necessary documentation and forms incorrectly and 2. The taxpayer offers to settle their tax debt for an outrageously small amount of money (like $400 on $5000 worth of debt). Although tax debt can be settled for that little, in most cases an offer like that is unreasonable. Fortunately for you, CLG Professional Services has completed many Offer In Compromises and can possibly do one for you!
One of the most unorthodox, but still incredibly effective methods of tax relief is to consult the Taxpayer Advocate Service. This is usually used when you have used all of your options with the IRS and still have not reached any solution. It is a last ditch solution and is used in the most desperate of situations.