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Can You Settle Your Tax Debt for Pennies on the Dollar?

By
Education & Training with Number Cruncher LLC

You have heard advertisements which state "You can settle your back tax debt for pennies on the dollar".  It’s important to know that the IRS doesn’t just approve everyone's Offer-in-compromise that requests one. The IRS must have a reasonable doubt that they will not be able to collect the full amount owed. You basically need to prove that the reduced settlement amount is the maximum amount they can expect to receive.

Below is the process that must be followed to request an Offer-In-Compromise:

  1. First, you apply for an Offer in Compromise (OIC) using Form 656.
  2. You must pay a $205application fee to apply.
  3. You must also provide a full financial disclosure that details all your income, expenditures, assets and equity.
  4. For wage earners and self-employed workers, you then must complete Form 433-A the “Collection Information Statement”; you also will need to submit supporting documentation.
  5. The IRS reviews your application package. If it’s accepted, settlement negotiation begins.
  6. You and the IRS come to an agreement of what percentage of your back taxes you can afford to pay back.
  7. Then once accepted, you have 2 years to repay that amount.
  8. You must continue to file taxes for each new year. If you receive a refund from filing within that two-year period, the IRS will apply it towards your settlement.

The focus of our practice is helping individuals and businesses resolve their IRS tax problems in the Las Vegas, Nevada, St. George, Utah areas, and elsewhere.  If you or someone you know is dealing with IRS problems, contact me at 702-469-9426 or candy@numbercruncherllc.tax.

 

Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

great advice - the IRS is a big bad wolf particularly for self employed people like real estate agents

Jul 15, 2021 08:07 AM
Ray Henson
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

I have always wondered how that all works.  Thank you for the explanation.

Jul 15, 2021 08:09 AM
Rocky Dickerson
Realty One Group - Las Vegas, NV
Superior Service!

Good morning Candy! It is a tool that people should use when they get into that kind of trouble

Jul 15, 2021 08:43 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Candy and thanks for the information you are providing people here in the Rain.  Me and Uncle Sam have a deal, and that is he likes when I mail him a check every quarters.

 

Jul 15, 2021 09:58 AM
CANDACE (Candy) STEVENS, EA
Number Cruncher LLC - Overton, NV
Helping Taxpayers Resolve IRS problems

You are correct Lise Howe.  It is a fact that schedule C filers have a higher rate of being audited. My best advice is to make sure your books are in good order!

Jul 16, 2021 09:29 AM
CANDACE (Candy) STEVENS, EA
Number Cruncher LLC - Overton, NV
Helping Taxpayers Resolve IRS problems

Good Morning Raymond Henson, eXp Realty.  You are welcome.  It is a lengthy process and not real easy!

Jul 16, 2021 09:30 AM
CANDACE (Candy) STEVENS, EA
Number Cruncher LLC - Overton, NV
Helping Taxpayers Resolve IRS problems

Good Morning Rocky Dickerson.  The big-name companies make it sound like it is a for sure thing.  It clearly isn't. I hope that people will use a tax resolution specialist that is trustworthy. 

Jul 16, 2021 09:31 AM
CANDACE (Candy) STEVENS, EA
Number Cruncher LLC - Overton, NV
Helping Taxpayers Resolve IRS problems

Hello Will Hamm.  That is a good deal to have with Uncle Sam.  Keep it up!

Have a Happy Day!

Jul 16, 2021 09:32 AM
Charles Ross - eXp Realty LLC
eXp Realty LLC Salina Group - Salina, KS
Love To Help People

Excellent Information. Thank you for sharing. Have a wonderful day and a blessed week 

Apr 12, 2023 07:53 PM