How To Negotiate A Debt Settlement With The IRS

If you are facing problems paying your bills and don’t want to declare bankruptcy or default on your outstanding debts, you have probably already heard about debt settlement and consolidation options for your credit card, store charge, and other unsecured revolving debt. But what about tax debt? If unpaid income taxes, back tax fees, or other IRS-owed debt are the reason for your financial issues, are there any options for consolidating or settling your tax debt like there are for settling your credit card debt? The short answer is yes- Debt Settlement IRS programs do exist.

How to Settle IRS Debt

There are a number of ways to settle IRS debt, and knowing which way will work best for you requires a thorough understanding of the methods by which it is done.

The main method by which IRS debt can be negotiated down or settled is through the use of the IRS’s Offer In Compromise program.
Using this program, anyone can attempt to negotiate a tax debt settlement with the IRS.
The IRS is aware that they may assess fees and back taxes, which may eventually become burdensome or impossible to repay in a reasonable amount of time. With this in mind, they will sometimes accept a reasonable offer which involves repayment of most of the debt which is owed.

The Process of Settling Debt

The process involves filing Form 656, the Offer in Compromise form, with the IRS office closest to you. After the form has been filed, the IRS will set up a case file and contact you regarding the debt that you owe them and the reasons why you are claiming that you cannot repay it. Be prepared to produce financial information such as pay stubs, income verification, and other information to support your case, as well as any information which may indicate that the tax debt is incorrect, if available.

It is important to note that the Offer in Compromise program is not one which is widely advertised or supported by the IRS. The IRS knows that they can wait a very long time in order to receive the payback for the debt that you owe them, so they are not particularly motivated to settle for less than the full amount, because they can continue to garnish wages, withhold extra taxes, or press criminal or civil lawsuit charges until they have received the full amount. If you are planning to attempt to negotiate an Offer in Compromise, you will want to prepare for the possibility that the offer will be rejected by the IRS.

Getting Help

Debt settlement IRS can be difficult and you should get the help of an experienced debt settlement attorney. An attorney with experience settling tax debt can help you interface with the IRS in order to negotiate the best and fairest settlement. He will act as your advocate throughout every step of the IRS debt settlement process and ensure your rights are protected under the law.

Need Debt Help?