Should I Hire Attorney For Debt Settlement With IRS?

There should be no question about hiring an attorney for an IRS debt settlement. The tax code is far from clear and easy to understand as a result of years of constant tinkering by Congress. This has resulted in an agency that, by law, does not have to play nice with a delinquent tax payer.

What The IRS Is Legally Entitled To Do For Collections

If you're ignoring the letters that the IRS is sending you, you're in for a rough ride. You'll find that after ignoring them for a year, the IRS will have liens on any property you own, garnished paychecks or put a levy on your bank account as well as taken back any refunds after the debt started. In short, the IRS will do anything they can to get their money. Compare this with the fact that a creditor can only harass you via the phone and mail but cannot touch your property unless they take you to court for a judgment. Truly you do not want to ignore contact from the IRS if you owe money on a return.

The Types of Settlements the IRS Offers

There are three main types of settlements offered by the IRS. Each process has their pros and cons that come with. Choosing wisely is the name of the game, which is why it's important to hire an experienced tax attorney.

• An offer in compromise is the most difficult settlement to get. This is where you and the IRS agree upon a set amount to be paid. This amount is less than the debt that you owe. The IRS must decide that the amount you offer is satisfactory to settle the debt. And that's where the IRS doesn't have to play nice. You can arrange for payment plans if the amount is accepted.
• A partial payment installment plan means you can enter into an agreed plan with the IRS to pay an amount in installments. Those who cannot meet the payments under the standard installment plan are put into this settlement. The amount owed is usually lessened in order to allow the debtor to pay off the back taxes.
• Penalty abatement is one of the easier ways to settle the tax debt. During collection efforts, the IRS will add penalties to the amount owed. The longer the debt is unpaid, the more penalties get piled on. Penalties can be rolled back provided the debtor starts a conversation with the agency and works out a payment plan.

When to Talk to a Lawyer

The aforementioned settlements are just the tip of the iceberg. Plans are just as varied as the tax code that brought you to the point of owing money. Negotiating them in your favor is difficult at best. Hiring a tax attorney that knows the ins and outs of the process is your best bet at owing the least amount. The best part about hiring legal help is knowing that the IRS won't be harassing you anymore.