The federal government has given the Internal Revenue Service the authority to collect taxes to fund government activities. If Indiana taxpayers fail to pay their taxes the IRS has the ability to use a variety of aggressive tax collection actions such as wage garnishment, bank account levies and property repossession to collect IRS taxes.

The IRS has created a several IRS tax settlement options they can use to help taxpayers get current on their tax debt. The IRS may be willing to accept less than the full amount of tax owed if they believe it will allow Indiana taxpayers to pay their future tax liability. All Indiana taxpayers who owe the IRS back taxes can talk to a tax professional for information about all of their tax settlement options.

Offer in Compromise

Offer in Compromise or OIC is one of the most popular methods used by taxpayers to settle IRS tax debt. Offer in Compromise allows the Indiana taxpayer to make an offer to the IRS and if the IRS accepts the offer, all the debt outlined in the OIC will be settled when the Indiana taxpayer meets all the requirements of the Offer in Compromise agreement. Penalties and interest will continue to accumulate while the Offer in Compromise is under review by the IRS.

The IRS has sole authority to accept or deny all Offer in Compromise offers. Most OIC offers will be denied. The IRS may be willing to negotiate with the taxpayer until both parties are satisfied with the offer amount. OIC can be complicated, time consuming and expensive. The IRS will most likely need a large amount of detailed financial information to complete the OIC. If the Offer in Compromise is denied the IRS may have more than enough information to continue their collections of the tax debt, but for some, Offer in Compromise is a great way for some taxpayers to settle tax debt for a fraction of the amount owed.

Qualifying for Offer in Compromise

Not all Indiana residents will qualify for an Offer in Compromise. To qualify, a taxpayer must meet the following requirements:

• Doubt as to Liability- If the IRS believes the amount of tax assessed is incorrect due to a miscalculation or incomplete information they may be willing to accept an Offer in Compromise. This condition is seldom used.
• Doubt as to Collectibility- If the IRS believes it is unlikely they will be able to collect the Indiana taxpayer’s debt either now or in the future, they may be willing to accept an Offer in Compromise. Under this condition the amount of debt is not in question, only the ability of the IRS to collect the debt.
• Effective Tax Administration- Indiana taxpayers who can prove they would suffer “an economic hardship which is unfair and inequitable” if they paid their tax debt may qualify for an Offer in Compromise. The elderly and handicapped most frequently meet this condition.

Indiana taxpayers who apply for an Offer in Compromise must also complete the following:

• Indiana taxpayers must pay all of their Internal Revenue Service tax debt on or before the federal tax deadline for the next five years.
• Indiana taxpayers must meet all the requirements of the Offer in Compromise agreement.
• Indiana taxpayers must submit all of their IRS tax returns on or by the federal tax deadline.

Installment Agreement

Many Indiana taxpayers will not want to use an Offer in Compromise to settle their back debt. An installment agreement is another IRS tax settlement option available. An installment agreement allows the Indiana taxpayer to make monthly payments to pay all of their IRS tax debt. The IRS is generally willing to allow most taxpayers who owe $25,000 or less to pay the debt in installments. The debt must be paid within 60 months. Indiana taxpayers who owe more than $25,000 will want to consult with a tax professional that has experience negotiating installment agreements.

Penalties and interest will continue to accrue for all outstanding debt for the length of the installment period. It is always less costly to pay all tax debt immediately instead of using a protracted installment agreement. The IRS will suspend all collection activities during the installment agreement.

The Internal Revenue Service can terminate an installment agreement (IA) for any of the following reasons:

• The Indiana taxpayer does not pay all of their monthly tax payments.
• The Indiana taxpayer fails to file their federal tax returns.
• The Indiana taxpayer pays less than the required monthly installment payment amount.  The IRS may give first time violators 30-60 days to meet the requirements of the IA.
• If the Indiana taxpayer’s financial condition substantially improves.
• If an Indiana taxpayer reports false financial information to the Internal Revenue Service during the installment agreement application process.

Indiana taxpayers who are applying for an installment agreement must meet all of the following requirements:

• All self-employed Indiana taxpayers must file quarterly tax returns and make quarterly tax payments.
• Indiana taxpayers must submit all of their tax returns each year.
• Indiana taxpayers must pay their federal taxes for the five years before the tax liability which can not be paid and is outlined in the installment agreement.
• Indiana taxpayers can not have made another installment agreement with the IRS within the previous five years.
• The IRS will review the Indiana’s taxpayer’s financial situation every two years.

Partial Payment Installment Agreement

Indiana taxpayers who do not want to use an OIC or who do not qualify for one may be able to settle tax debt with a partial payment installment agreement (PPIA). The PPIA differs from the installment agreement because partial instead of full monthly installments are made. If the IRS accepts the PPIA, debt which is not part of the agreement will be considered forgiven. Partial payment installment agreements can be less expensive and easier to implement than Offer in Compromise.

The IRS will stop all collection actions against the Indiana taxpayer during the PPIA, but penalties and interest will continue to accrue on the IRS tax debt. The IRS will review the PPIA every 2 years to determine if the PPIA can be altered or terminated.

Currently Not Collectible

Under certain conditions the IRS will determine that an Indiana taxpayer’s IRS debt is not collectible. If the IRS makes this determination, they will stop all debt collection efforts. Penalties and interest will continue to accrue while the debt is considered “currently not collectible”.

The Internal Revenue Service will send written notice to the Indiana taxpayer every year notifying the taxpayer of the existing debt. This notice is not considered a bill. If the IRS fails to collect the debt within ten years the statute of limitations will expire and the debt will be forgiven.

Penalty Abatement

Penalties may be assessed against an Indiana taxpayer for a variety of reasons including: failing to pay IRS debt, failing to file a tax return or requesting a false refund. Under certain conditions the IRS may be willing to abate or reduce the penalties. Indiana taxpayers who are requesting penalty abatement need a valid reason. The IRS may not be willing to reduce or eliminate all penalties.

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Oregon taxpayers who owe IRS back taxes may be able to settle their tax debt using an IRS tax settlement option. The Internal Revenue Service (IRS) has created tax settlement options to help taxpayers pay their back taxes and meet all future tax liability. In certain cases, Oregon taxpayers may be able to pay only a fraction of their total tax bill.

Oregon taxpayers who need information about settling their tax liability should contact a tax professional such as an enrolled tax agent, certified public accountant or tax attorney who can outline which plan may be best. Repayment options can vary significantly and the recommended plan may not be the same for every Oregon taxpayer.

Offer in Compromise in Oregon

One of the most popular types of IRS tax settlement options is Offer in Compromise (OIC). Offer in Compromise allows the Oregon taxpayer to make an “offer” to the Internal Revenue Service to settle IRS tax debt. The IRS has the sole authority to accept or decline the offer. Oregon taxpayers do not have the legal authority to sue the IRS. The Internal Revenue Service will frequently negotiate or review their position through the Offer in Compromise appeals process. Most OIC offers are declined. The current acceptance rate is approximately 25% at the initial application level, but more are accepted on appeal.

Offer in Compromise can be costly and time consuming. If the Oregon taxpayer does not receive an OIC approval, the Internal Revenue Service will have detailed information to continue their collection efforts. It is important to contact a tax professional prior to making an Offer in Compromise.

Not all Offer in Compromise offers will be accepted. For an Oregon taxpayer to receive an Offer in Compromise the IRS must conclude one of the following:

1. Doubt as to Liability- Oregon taxpayers who believe their tax debt is not correct may qualify for an Offer in Compromise. This qualification is seldom met.
2. Doubt as to Collectibility – The Internal Revenue Service, in some circumstances, may conclude that they will not be able be able to collect tax debt or the collection of the debt will be too costly. Under this condition, the amount of tax debt assessed is not in question, only the ability of the IRS to collect the debt.
3. Effective Tax Administration- Certain Oregon taxpayers who have experienced a devastating financial crisis may not be able to pay their federal tax debt. If the Internal Revenue Service agrees that collection of the debt will cause “an economic hardship which is unfair and inequitable” they may accept an Offer in Compromise. This condition is most frequently used for the handicapped and the elderly.

Oregon taxpayers who are considering Offer in Compromise must also meet the following conditions:

• Offer in Compromise obligations must be met and payments made
• Oregon taxpayers must pay all of their IRS tax debt for the next five years on or before the Federal tax deadline
• All federal tax returns must be submitted on or before the federal tax deadline
• All federal refunds will be applied to the Oregon taxpayers outstanding tax debt

Installment Agreement

Not all Oregon taxpayers will want to use an Offer in Compromise for settling back taxes. Installment agreements can also be used to settle tax debt by repaying federal tax liability in monthly installments. The type of installment agreement used will depend on the amount of debt the Oregon taxpayer owes.

For debt of $10,000 or less (not including interest and penalties), an Oregon taxpayer can use the guaranteed installment plan which must be paid with in three years. For debt under $25,000, Oregon taxpayers can use a streamlined installment agreement and repay their debt with in five years. If a taxpayer owes more than $25,000 it is important to call a tax professional to review the best options for settling the tax debt.

Not everyone will qualify for an installment agreement. To qualify, Oregon taxpayers must complete the following:

• All self-employed Oregon workers must file and pay quarterly tax estimates
• Oregon workers must file all of their federal tax forms
• All federal tax debt must be paid for the 5 years prior to the amount defined in the installment agreement (which can not be paid)
• Oregon taxpayers can not have had an installment agreement with in the last 5 years

Partial Payment Installment Agreement

Certain Oregon taxpayers will not be able to settle their tax debt with an installment agreement or Offer in Compromise. The IRS also allows the repayment of tax debt with a Partial Payment Installment Agreement (PPIA). The PPIA will allow the Oregon tax payer to make partial payments for tax debt. Penalties and interest will continue to accrue during the payment period. It is always less expensive to pay tax debt in one lump sum. One benefit of the PPIA is the IRS will cease collection efforts.

The Partial Payment Installment Agreement will be reviewed by the Internal Revenue Service every two years and if the taxpayer’s financial situation has improved the Internal Revenue Service may amend the plan to increase the payments or cancel the plan entirely.

Currently Not Collectible

If an Oregon taxpayer’s situation becomes so dire that they are unable to pay IRS tax debt and the IRS concludes collection of the debt is impossible, the IRS may declare the debt currently not collectible. Currently not collectible status will halt all collection actions against the tax payer including wage garnishments and bank account levies. Interest and penalties will continue to collect and the tax debt will not be eliminated.

Penalty Abatement

The Internal Revenue Service will assess an Oregon taxpayer’s penalties for a variety of reasons including: failure to file a tax return, falsifying financial data on a tax return, or requesting a false refund. If you have been assessed penalties the Internal Revenue Service may be willing to reduce or eliminate those penalties. There must be a good reason to abate the penalties and Internal Revenue service may not eliminate all penalties.

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Oregon taxpayers who have back taxes or who need help filing past tax returns, avoiding bankruptcy, reviewing IRS tax settlement options or reducing tax liability might benefit from the experience and knowledge of a tax professional.

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Delaware taxpayers who have outstanding federal tax debt have several IRS tax settlement options to settle their debt. The Internal Revenue Service (IRS) may be willing to negotiate a tax settlement for less than the total tax liability owed if the IRS believes the negotiation will allow Delaware taxpayers to fulfill their future tax obligations.

Delaware residents who are considering an IRS tax settlement option should contact a tax professional such as an enrolled agent, tax attorney or certified tax account to discuss their options. Tax professionals can also perform a variety of other tax services for Delaware taxpayers who are considering a IRS tax settlement option.

Offer in Compromise in Delaware

Offer in Compromise is one of the most popular IRS tax settlements offered by the Internal Revenue Service to collect federal tax debt. Offer in Compromise may allow Delaware taxpayers to make an offer which the Internal Revenue Service will accept or deny. If the offer is accepted, the amount paid will be considered a “compromise” amount to settle IRS tax debt. In many cases Offer in Compromise may allow the Delaware taxpayer to resolve their outstanding tax debt for a fraction of the full amount owed.

The IRS will not accept all Offer in Compromise offers, in fact, currently the acceptance rate is approximately 25%. More OIC offers will be accepted after all negotiations are complete. Offer in Compromise can be expensive and time consuming. The Internal Revenue Service may also use the information they gather for the Offer in Compromise to continue tax collection actions against the taxpayer if the OIC is denied.

Delaware taxpayers will have to meet one of the following conditions to qualify for an Offer in Compromise:

• Effective Tax Administration- Certain Delaware taxpayers may not be able to pay their tax debt because of a personal crisis, job loss or other financial hardship. If the Internal Revenue Service determines that a taxpayer can not pay their tax debt with out facing an economic hardship which is “unfair and inequitable”, the IRS may be willing to accept an Offer in Compromise.
• Doubt as to Collectibility- In certain cases, the Internal Revenue Service may determine that tax debt will be impossible to collect. The IRS is not questioning the amount of the tax debt owed, only the ability for them to collect the debt.
• Doubt as to Liability- Certain Delaware taxpayers who doubt the amount of tax liability they owe may be able to make a case for Offer in Compromise. This condition is seldom used.

Delaware taxpayers will also have to complete the following tasks to qualify for an OIC or have their debt settled:

• All requirements for the Offer in Compromise must be completed
• Delaware taxpayers must pay all of their IRS tax debt on or before the federal tax deadline for the next 5 years
• Delaware taxpayers must file and submit all IRS tax returns before the federal tax deadline
• Delaware taxpayers must agree that all tax refunds will be applied to their outstanding tax debt

Installment Agreement

Not all Delaware taxpayers will want to settle their tax debt with an Offer in Compromise. Another IRS tax settlement option is the installment agreement. The installment agreement allows a Delaware taxpayer to pay their IRS tax debt in monthly installments. Installment plans will vary depending on the amount of tax debt owed.

Delaware taxpayers who owe $10,000 or less (excluding penalties and interest) may be able to use a guaranteed installment plan which requires the IRS debt be paid with in 3 years. Delaware taxpayers owing less than $25,000 may be able to use a streamlined plan and repay tax debt with in 5 years. Delaware taxpayers with more than $25,000 in IRS tax debt should call a tax professional for help negotiating an installment plan with the Internal Revenue Service.

To qualify for an installment agreement, a Delaware taxpayer must complete the following tasks:

• Delaware residents who are self-employed must submit quarterly IRS tax returns and estimated tax payments
• Complete all federal tax returns by the federal tax deadline
• Pay all federal tax debt for the 5 years before the current IRS tax debt which can not be paid
• Delaware taxpayers can not have another installment agreement with the Internal Revenue Service for the last five years before the proposed installment agreement

Partial Payment Installment Agreement

Certain Delaware residents will not be able to use an installment agreement or an Offer in Compromise to settle their IRS tax debt. The Internal Revenue Service may allow these taxpayers to use a partial payment installment agreement or PPIA which will allow taxpayers to repay tax debt in partial payments. Unfortunately, under the PPIA plan, interest and penalties will continue to accrue. Partial payment installment agreements are reviewed every two years and the payment amount may be increased or the plan dissolved if the taxpayer’s financial situation has improved.

Currently Not Collectible

The Internal Revenue Service may determine certain taxpayer’s debt is currently not collectible. Taxpayers who meet this condition will still have the debt and penalties and interest will continue to accrue, but the IRS will stop their collection efforts and release levies against the taxpayer.  Currently not collectible may give the taxpayer enough of a break to regain their financial footing.

Penalty Abatement

Delaware taxpayers who fail to pay their taxes, falsify their tax returns or claim a false refund, may be assessed penalties by the Internal Revenue Service. Certain penalties may be dismissed for valid reasons by the Internal Revenue Service through the penalty abatement program. Not all penalties can be dismissed. It is important to contact a tax professional for help to negotiate penalty abatement with the Internal Revenue Service.

Do I Need Tax Professional?

Delaware taxpayers who owe federal taxes may be facing aggressive collection tactics by the IRS. The Internal Revenue Service should not be ignored. Tax professionals have the experience necessary to work with the IRS to negotiate the best possible settlement option available. Tax professionals can provide a wide variety of services including filing past tax returns, minimizing tax liability and avoiding bankruptcy.

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Georgia residents who have federal tax debt may have several options to eliminate or reduce the amount of back taxes they owe. The Internal Revenue Service (IRS) has been given the authority by the United States federal government to create tax settlement options which allow Georgia taxpayers to settle their tax debt for a fraction of the total amount owed.

Qualifying for a tax settlement plan may help stop the aggressive collection efforts of the IRS including: wage garnishment, repossessions and bank account levies. The IRS may accept a settlement option if doing so will allow the Georgia taxpayer to meet their current and future tax liabilities.

Georgia residents who are considering an IRS tax settlement option need to contact a tax professional such as an enrolled tax agent, tax attorney or certified public accountant who can review all the available tax settlement options.

Offer in Compromise

Offer in Compromise is one of the most popular IRS tax settlement options available for Georgia taxpayers. An Offer in Compromise or OIC allows the Georgia taxpayer to propose an amount to the Internal Revenue Service to settle their federal tax debt. If the IRS considers the proposed amount reasonable, they will accept the offer. If all the requirements outlined in the OIC agreement are met, then the Georgia taxpayer’s debt is considered settled. Many times the Internal Revenue Service accepts much less than the full amount of tax debt owed.

Approximately 80% of first time OIC offers are declined, but the Internal Revenue Service may be willing to continue negotiations with the Georgia taxpayer to identify an amount which is agreeable to both parties. Offer in Compromise can be time consuming, expensive and complicated. The Internal Revenue Service will need a substantial amount of financial data to process the agreement and if the OIC is denied, they can use this information to continue the debt collection process.

Qualifying for Offer in Compromise

Not all Georgia taxpayers with federal tax debt will be able to qualify for an OIC. Offer in Compromise is accepted by the IRS for the following reasons:

• Doubt as to Liability- Under this condition the IRS has some doubt as to the accuracy of the amount of tax debt which has been assessed against the Georgia taxpayer. This condition is not frequently met.
• Doubt as to Collectibility- If the Internal Revenue Service does not believe they will be able to collect the tax debt now or in the immediate future, they may be willing to accept an Offer in Compromise. This condition differs from the first because the amount of debt is not in question, only the ability of the Internal Revenue Service to collect the debt.
• Effective Tax Administration- Under certain conditions, a Georgia taxpayer may experience an “an economic hardship which is unfair and inequitable” if they pay their federal tax debt. The IRS may be willing to accept an OIC offer under these circumstances. This is most frequently the case with the elderly and the handicapped.

Georgia taxpayers applying for an Offer in Compromise must also complete the following:

• Georgia taxpayers will have to pay all of their future tax debt before or on the federal tax deadline for the next five years
• All the Offer in Compromise requirements must be completed
• Georgia taxpayers must fill out and complete all of their IRS tax returns by the tax deadline

Installment Agreement

Georgia taxpayers who do not want to use or do not qualify for an Offer in Compromise, may be able to use an installment agreement (IA) to repay IRS debt. Under an installment agreement, Georgia taxpayers can pay the total amount of tax debt in monthly installment payments. Georgia taxpayers who owe less than $25,000 can generally get an installment agreement to repay their debt over a 60 month period. Georgia taxpayers who owe more than $25,000 may want to contact a tax professional to help negotiate a payment plan. Penalties and interest will continue to accrue for the entire duration of the installment period. It is always less expensive to pay IRS tax debt in one lump sum payment.

The Internal Revenue Service can terminate an installment agreement if:

• Georgia taxpayers fail to meet the requirements of the IA (not paying the monthly tax payments or not filing tax returns).
• Georgia taxpayers fail to make the full payment amount. The Internal Revenue Service may give Georgia taxpayers a grace period of 30-60 days for the first violation before terminating the installment agreement.
• If a Georgia taxpayer’s financial condition improves the IRS can terminate the installment agreement. A review of the installment agreement will be done every two years by the IRS.
• If Georgia taxpayers provide false or inaccurate tax information during the installment agreement application process the IA can be terminated.

Georgia taxpayers who are considering an installment agreement must meet the following requirements:

• All self-employed Georgia taxpayers must file quarterly federal tax returns and make quarterly estimated tax payments.
• Georgia taxpayers must file all federal tax returns.
• Georgia taxpayers must pay their tax debt for the five years before the tax liability which can not be paid.
• Georgia taxpayers can not have made another installment agreement with the IRS with in the last five years.

Partial Payment Installment Agreement

Georgia taxpayers who are unable to pay all of their IRS taxes may be able to settle their taxes under a partial payment installment agreement. Partial payment installment agreements or PPIA allow Georgia taxpayers to pay their federal back taxes in partial monthly payments. The PPIA differs from the installment agreement because not all of the debt is paid and the debt which is not paid is considered forgiven by the IRS.

Partial payment installment agreements may be less expensive, less complicated and less time consuming than an Offer in Compromise. The PPIA will also stop the IRS from trying to collect taxes. Unfortunately, penalties and interest will continue to accrue on the outstanding tax debt. Every 2 years the IRS will review the PPIA and determine if the taxpayer’s financial condition has improved, if it has, the IRS can increase the PPIA payments or terminate the PPIA entirely. It is always less expensive to pay federal tax debt as soon as possible.

Currently Not Collectible

If the Internal Revenue Service determines they will not be able to collect a tax debt, they may decide to change a Georgia’s tax status to currently not collectible. Currently not collectible status will stop the Internal Revenue Service debt collection efforts including wage garnishments and tax levies. Every year the Internal Revenue Service will send notice of the tax debt (not considered a bill). If the tax status is currently not collectible for over ten years and the IRS does not attempt to collect the tax, the statute of limitations will expire and the debt will be forgiven.

Penalty Abatement

Penalties may be assessed for a variety of reasons including: failure to file a tax return, claiming a false refund, or reporting false tax information. If a Georgia taxpayer has a valid reason, the IRS may be willing to reduce or abate the penalty. Reasons for penalty abatement may include: personal duress, disasters, false advice from a tax professional or failing physical health. There may be penalties which will not be abated.

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The Internal Revenue Service (IRS) has the authority from the federal government to collect taxes. These taxes are used to fund the activities of the federal government. If Illinois taxpayers fail to pay their federal taxes, the IRS has the ability to use a variety of aggressive collection techniques (wage garnishment, repossession, bank levies) to ensure the taxes are collected.

The IRS has created a variety of IRS tax settlement options to help taxpayers pay their taxes. In many cases, the IRS may be willing to accept far less than the total amount owed. The IRS will do this to if they believe it will help the taxpayer pay their future tax debt. All Illinois taxpayers who are considering an IRS tax settlement option should contact a tax professional for help.

Offer in Compromise

Offer in Compromise (OIC) is one of the most common IRS tax settlement options used to pay IRS tax debt. Illinois taxpayers can make an offer to the IRS and the IRS has the option to accept or deny the OIC offer. The IRS denies most OIC offers, but may be willing negotiate. If the IRS accepts the OIC offer and the taxpayer meets all of the OIC requirements, the back tax debt will be settled. Penalties and interest will continue to accrue until the OIC is accepted by the Internal Revenue Service.

Offer in Compromise can be complicated and time consuming. The IRS will request detailed information from the taxpayer; information which later can be used to continue collecting tax debt. Offer in Compromise is one of several IRS tax settlement options available and may not be the best option for all Illinois taxpayers.

Qualifying for Offer in Compromise

Illinois taxpayers who are considering an Offer in Compromise must meet one of the following conditions.

• Doubt as to Liability- If the IRS makes a potential miscalculation or if the Illinois taxpayer has additional information which may prove the IRS assessed the wrong amount of tax debt, the IRS may be willing to accept an OIC offer. This does not occur often.
• Doubt as to Collectibility- If the IRS believes they will be unable to collect the debt now or in the future or if collection of the debt may be too high, they may be willing to accept the OIC. The amount of debt is not in question.
• Effective Tax Administration- There may be some Illinois taxpayers who are unable to pay their tax debt because payment would cause a hardship which is unfair and inequitable. The elderly and handicapped most frequently meet this condition.

The following tasks must also be completed for an Offer in Compromise:

• All federal tax debt must be paid by the Illinois taxpayer before the federal tax deadline for the next 5 years.
• All OIC requirements must be met by the Illinois taxpayer.
• All federal taxpayers must complete and submit all federal tax returns by the tax deadline.

Installment Agreement

Illinois taxpayers who do not want to use an OIC or who do not qualify for one may be able to use an installment agreement to settle IRS tax debt. Installment agreements allow an Illinois taxpayer to pay all of their federal tax debt in monthly installments. For Illinois taxpayers who owe $25,000 or less, the IRS is generally willing to allow an installment plan. The debt must be repaid within 60 months. Illinois taxpayers who owe more than $25,000 should contact a tax professional for help negotiating an installment agreement.

Installment agreements will not stop penalties and interest from accruing on the outstanding IRS debt. It is always less expensive to pay federal debt immediately. IRS collection will stop while the installment agreement is active. The IRS can end an installment agreement for a variety of reasons including any of the following:

• Failure to pay all of the monthly installment payments.
• Failure to file federal tax returns.
• Paying less than the required monthly installment payment amount.  The Internal Revenue Service may give first time violators 30-60 days to make the payments.
• An Illinois taxpayer’s financial condition substantially improves.
• Providing false financial information to the IRS during the installment agreement application process.

Illinois taxpayers must meet the following requirements:

• Illinois taxpayers who are self-employed must file quarterly tax returns and make quarterly federal tax payments.
• Illinois taxpayers must file all of their federal tax returns every year.
• Illinois taxpayers must pay their taxes for the 5 years before the IRS tax debt which can not be paid.
• Illinois taxpayers can not have made another installment agreement with the Internal Revenue Service within the previous 5 years.
• The Internal Revenue Service will review the Illinois taxpayer’s financial situation every 2 years.

Partial Payment Installment Agreement

Illinois taxpayers who are unable or do not want to use an OIC or an installment agreement may be able to use the partial payment installment agreement (PPIA) to settle IRS tax debt. The PPIA is different than the installment agreement because the full amount of tax debt is not paid, only an agreed upon payment amount. The debt not paid is considered settled. A partial payment installment agreement is less expensive and easier to implement than an OIC agreement.

Partial payment installment agreements will stop IRS collection efforts. Penalties and interest will continue to accumulate on the outstanding IRS tax debt. The partial payment installment agreement will be reviewed every two years. If the Illinois taxpayer’s financial situation improves the PPIA may be altered to increase payments or cancelled.

Currently Not Collectible

If the IRS determines they can not collect an Illinois taxpayer’s tax debt, they will change the tax debt status to “currently not collect”. Penalties and interest will continue to collect under this condition but the IRS will cease all collection actions.

Written notice will be sent annually to the Illinois taxpayer to notify them of their existing IRS debt. The notification is not a bill. If the Internal Revenue Service does not collect the tax debt within 10 years, the debt will expire.

Penalty Abatement

The Internal Revenue Service will assess penalties to Illinois taxpayers for a variety of reasons including: not paying taxes, not filing a tax return or requesting a false tax refund. Illinois taxpayers who owe penalties may be able to request a penalty abatement to reduce or eliminate tax debt. Penalties will not be abated without a valid reason. Reasons may include: serious mental or physical health conditions, disasters, high medical expenses, false information from a tax professional or personal duress. There may be certain penalties the Internal Revenue Service will not be willing to abate.

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Maryland taxpayers who owe federal tax debt may have the ability to settle their debt with an IRS tax settlement option. The IRS may be willing to accept less than the full amount of tax debt owed if they believe accepting a settlement offer will increase the chance that taxpayers will pay all their future tax liability and the IRS can avoid accepting a protracted installment agreement or declaring tax debt as currently not collectible.

The IRS has sole authority to collect federal taxes. If Maryland taxpayers do not pay their taxes they can become the target of aggressive collection actions by the IRS. Maryland taxpayers who need more information about IRS tax settlement options can contact a tax professional.

Offer in Compromise

Offer in Compromise is one of the most popular IRS tax settlement options. Offer in Compromise or OIC allows Maryland taxpayers to offer the IRS a settlement amount and if the IRS accepts the offer it will be considered a compromise tax payment and all other tax debt will be settled. The IRS will not accept all OIC offers and Maryland taxpayers will not have legal recourse against the IRS for OIC denials.

The IRS currently denies approximately 80% of first time OIC offers. More OIC offers are accepted after negotiations and appeals. After the Offer in Compromise is accepted, all IRS collection efforts and accumulation of penalties and interest will cease.

Offer in Compromise can be time consuming, expensive, and difficult to implement. The IRS will request detailed financial information from Maryland taxpayers and the requested information can be used to continue collection efforts if the Offer in Compromise is denied. Offer in Compromise is one of several IRS tax settlement options available to Maryland taxpayers to pay tax debt and it may not be the best one.

Qualifying for Offer in Compromise

Maryland taxpayers will have to meet one of the following criteria to qualify for an Offer in Compromise:

• Doubt as to Liability- Maryland taxpayers who can prove the amount of IRS tax debt assessed against them may be incorrect may qualify for an Offer in Compromise. This condition does not frequently occur.
• Doubt as to Collectibility- Under this condition the amount of tax debt is not in question only the ability of the Internal Revenue Service to collect the debt. An OIC also may be accepted if the IRS has concluded that it is too expensive to collect tax debt.
• Effective Tax Administration- Maryland taxpayers who are unable to pay IRS tax debt because paying the debt would cause a “hardship which is inequitable or unfair” may receive an Offer in Compromise. The handicapped and elderly most frequently qualify under this condition.

Maryland taxpayers must also complete the following tasks for an Offer in Compromise:

• Maryland taxpayers must pay all federal tax debt before the federal deadline for the next five years.
• Maryland taxpayers must complete the Offer in Compromise requirements.
• Maryland taxpayers must be complete and submit their tax returns to the IRS by the federal tax deadline.

Installment Agreement

Another IRS tax settlement option available for Maryland taxpayers is an installment agreement. The installment agreement allows Maryland taxpayers to pay all of their federal tax debt in monthly installment payments over a specified period of time. Maryland taxpayers who owe $25,000 or less can usually qualify for an installment agreement if they can repay their debt within 60 months.

Maryland taxpayers who owe more than $25,000 may want to contact a tax professional to help them develop an installment agreement. Penalties and interest will continue to accumulate during the installment period, but the IRS will stop their collection efforts. It will always be less expensive to pay all tax debt with one lump sum payment. The Internal Revenue Service can terminate an installment agreement if the Maryland taxpayer does any of the following:

• Fails to pay their monthly installment agreement payments. First time violators may be granted a 30-60 day grace period.
• Fails to submit their tax returns each year.
• If the Maryland taxpayer’s financial situation improves drastically
• Provides incorrect financial information to the IRS for the installment agreement.
• If self-employed taxpayers fail to submit tax returns each quarter or make their quarterly tax payments.
• Fails to make all of their tax payments for the 5 years before the IRS tax debt which can not be paid.
• If the taxpayer has had another installment agreement within the last 5 years.

Partial Payment Installment Agreement

A partial payment installment agreement (PPIA) may be another option for Maryland taxpayers who owe IRS tax debt. The PPIA can be simpler and less expensive than an Offer in Compromise. The PPIA differs from an installment agreement because the Maryland taxpayer will only have to make partial monthly installment payments. All tax debt which is not paid will be considered forgiven by the IRS.

The PPIA will not stop penalties and interest from accruing, but it will stop the IRS from continuing debt collection actions against the Maryland taxpayer. The IRS will review the financial status of the Maryland taxpayer every 2 years. If the taxpayer’s financial condition dramatically improves, the IRS can either modify or terminate the PPIA plan.

Currently Not Collectible

If Maryland taxpayers are unable to pay their tax debt the IRS can declare tax debt as currently not collectible. The IRS will stop all collection efforts, but penalties and interest will continue to accumulate.

Each year the Internal Revenue Service will send written notification to the Maryland taxpayer outlining the amount of tax debt under the currently not collectible tax status. The IRS has ten years to collect the tax debt. After ten years if the taxes have not been collected, the statute of limitations will expire and the debt will be forgiven.

Penalty Abatement

The IRS will assess penalties against Maryland taxpayers for a variety of tax reporting infractions. Penalties may be assessed if the taxpayer fails to submit a tax return, reports incorrect financial information or requests a false refund. In certain cases, if the taxpayer has a valid reason the IRS may be willing to lower or abate the taxpayer’s penalties. Valid reasons for abatement may include: personal duress, natural disasters, poor health or inaccurate professional advice.

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The Federal government has given the Internal Revenue Service (IRS) the legal right to collect federal tax debt. Arkansas taxpayers who fail to pay their federal taxes are with holding money from the government to fund government programs and activities.  The Internal Revenue Service has the authority to use a variety of very aggressive collection tactics to help the federal government recoup tax liability such as wage garnishments, tax levies, tax liens, repossession of your property, fines or put you in jail.

Do not let the Internal Revenue Service bully you. If you live in Arkansas and the IRS is disrupting your life, contact a tax professional such as an enrolled tax agent, tax accountant or tax attorney to discuss available tax settlement options.

Internal Revenue Tax Settlement Options

If you have unpaid taxes, the Internal Revenue Service may allow you, in certain circumstances, to settle your tax debt for less than you owe. The Internal Revenue Service will agree to a tax settlement when it is in the best interest of the government. There are a variety of tax settlement options which may be available to you such as Offer In Compromise, Installment Plan, Penalty Abatement, or Currently Not Collectible.

Offer in Compromise

Offer in Compromise or OIC is one method Arkansas taxpayers may settle IRS tax liability. Taxpayers must meet a specific set of criteria to qualify for Offer in Compromise. The Internal Revenue Service may be willing to accept less than the full amount owed hoping that you will be able to fulfill your future tax obligations. The Internal Revenue Service only accepts approximately 20% of the OIC offers. If you are considering Offer in Compromise, it may be beneficial to discuss your OIC offer with a tax professional.

Offer in Compromise may be considered if one of the following can be proven:

• Doubt as to Liability – The Internal Revenue Service may agree to an Offer in Compromise if there is a doubt to the amount of tax debt owed.
• Doubt as to Collectibility – The Internal Revenue Service may accept an Offer in Compromise if they believe it is unlikely the debt will ever be collected. Under this condition, there is not a doubt as to the amount of federal tax liability.
• Effective Tax Administration – Certain individuals may have hardships which will not allow them to pay their federal tax bills with out “economic hardship which is unfair and inequitable”. The handicapped and elderly are the most common individuals who use this condition to qualify for Offer in Compromise.

Individuals must complete the following tasks in addition to meeting the criteria above:

1. Individuals must pay their federal taxes on time for the next 5 years
2. All requirements outlined in the Offer in Compromise plan must be followed
3. Federal tax returns must be filed before or by the tax extension deadline
4. The Internal Revenue Service will apply all of the future tax refunds to your tax liability

Installment Agreements for Arkansas Taxpayers

The installment agreement is the most common payment method used to pay IRS back taxes to the Internal Revenue Service. If the amount owed is less than $25,000, the IRS generally will agree to the installment plan. If you owe more than $25,000, it may be a good idea to review your options with a tax professional to discuss other tax settlement options. Penalties will continue to accrue during the installment period. It will always be less expensive to pay all federal tax debt in total if possible.

Partial Payment Installment

The Internal Revenue Service has developed the Partial Payment Installment Agreement (PPIA) as another repayment plan option to pay federal tax debt. The PPIA allows the taxpayer to make partial monthly payments and potentially settle the tax debt for less than the full amount of tax debt owed. Arkansas residents who are considering a PPIA must submit complete financial information and the proper forms. The Internal Revenue Service will review the PPIA plan every 2 years. The terms of the PPIA may be increased if your financial situation improves. Many taxpayers find this method of resolving tax debt easier than Offer in Compromise.

Currently Not Collectible

Certain Arkansas taxpayers will have financial difficulties which will make it impossible to pay federal tax debt. In these circumstances the Internal Revenue Service may decide the tax debt is “currently not collectible” due to the severe economic hardship debt collection would cause for the Arkansas taxpayer. Currently not Collectible will stop IRS debt collection efforts, but the back taxes will remain and interest and penalties will continue to accrue.

Penalty Abatement

Penalties may be assessed by the Internal Revenue Service for failing to pay federal taxes, providing inaccurate financial information on tax forms, or requesting a fraudulent refund. If you have been assessed penalties you can not pay, under certain circumstances the Internal Revenue Service may be willing to remove those penalties. Tax professionals can help Arkansas taxpayers complete the appropriate forms and provide the correct information to the Internal Revenue Service.

Should I use a Tax Settlement Option?

The Internal Revenue Service is aggressive and they can make your life difficult. It is not a good idea to avoid their phone calls or fail to open mail. Unlike other debt collectors the IRS can:

• Freeze the money in your bank accounts
• Seize your business and personal assets
• Seize your equipment
• Seize your personal property
• Garnish your wages

Talk to a tax professional today to discuss your options for settling back tax issues and getting your life back.

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The Internal Revenue Service (IRS) has the authority to collect taxes for the federal government. If the IRS has reason to believe the full amount of tax debt is not collectible, they have the legal authority to settle the tax debt for a fraction of the full amount owed with an IRS tax settlement option. The IRS may be willing to settle tax debt for less than the full tax owed to avoid declaring a Michigan taxpayer’s debt as currently not collectible or having to negotiate a lengthy installment agreement.

Michigan taxpayers who are facing aggressive debt collection tactics by the IRS such as a repossession or wage garnishment should contact a tax professional such as an enrolled agent, certified public accountant or tax attorney to discuss the options for settling back tax debt with an IRS tax settlement option.

Offer in Compromise

One of the most popular types of IRS tax settlement options used by Michigan taxpayers is the Offer in Compromise. Offer in Compromise or OIC allows Michigan taxpayers to make an offer to settle their tax debt. The IRS may be willing to accept less than the full amount of tax debt owed. If the IRS accepts the offer, the tax debt outlined in the offer will be considered settled.

The IRS accepts approximately 25% of Offer in Compromise offers at the initial application level. More may be accepted after extended negotiations or a formal appeal. Penalties and interest will continue to accrue while the OIC is under consideration. If the Offer in Compromise is denied the IRS may use the detailed information they have gathered to continue their collection efforts. Offer in Compromise can be expensive, time consuming and complex. It is only one of several IRS tax settlement options available to Michigan taxpayers and it is not always the best.

Qualifying for Offer in Compromise

Michigan taxpayers who are considering an Offer in Compromise must meet one of the following requirements:

• Doubt as to Liability- Under certain conditions a taxpayer may be able to prove the amount of tax debt they have been assessed is incorrect. Taxpayers who can prove the examiner interpreted the IRS tax law incorrectly, all of their tax evidence was not considered or that more information has surfaced which can prove the tax calculation was incorrect may qualify for an OIC. This condition is not frequently met.
• Doubt as to Collectibility- This condition differs from the first in that the amount of tax debt is not in question, only the ability of the Internal Revenue Service to collect the debt. The IRS also may determine collection of the tax debt is too expensive.  If either of these conditions is met, the IRS may accept an OIC.
• Effective Tax Administration- Some Michigan residents may suffer “an economic hardship which is unfair and inequitable” if they pay their IRS tax debt. If the IRS agrees they may accept an Offer in Compromise.

Michigan Taxpayers must complete the following tasks:

• Michigan taxpayers must pay all of their future tax debt on or before the federal tax deadline for the next five years.
• Michigan taxpayers must complete all Offer in Compromise requirements.
• Michigan taxpayers must submit all of their federal tax returns by the federal tax deadline.

Installment Agreement

Installment agreements (IA) are another popular IRS tax settlement option.  Installment agreements allow taxpayers to pay all of their IRS tax debt with monthly installment payments instead of making one lump sum payment. Penalties and interest will continue to accrue until the payments are complete. It is always less expensive to pay IRS tax debt in a lump sum payment. Michigan taxpayers with debt of $25,000 or less can apply for an installment agreement to repay their tax debt within 60 months. Michigan taxpayers with IRS tax debt exceeding $25,000 should contact a tax professional for help negotiating an installment agreement.

The IRS has the legal right to revoke an installment agreement if the Michigan taxpayer fails to complete any of the following tasks:

• Failing to make all the required monthly installment payments or paying less than the agreed upon monthly payment amount. First time offenders may be extended a grace period of 30-60 days.
• Failing to file annual federal tax returns.
• The installment agreement may be cancelled if the Michigan taxpayer’s financial situation improves.
• Providing false information to the Internal Revenue service on the installment agreement application.

All Michigan taxpayers must complete the following tasks:

• All self-employed Michigan taxpayers must file quarterly federal tax returns and make quarterly estimated federal tax payments.
• Michigan taxpayers must file federal tax returns each year.
• Michigan taxpayers must pay their tax debt for the five years before the tax liability which can not be paid.
• Michigan taxpayers can not have made another installment agreement with the IRS with in the previous five years.
• A review will be done by the IRS every two years to analyze the financial status of the Michigan taxpayer.

Partial Payment Installment Agreement

A partial payment installment agreement or PPIA is available for Michigan taxpayers who can not pay the full amount of their tax debt with an installment agreement and who may not qualify for an OIC. The IRS may be willing to allow Michigan taxpayers to repay their federal tax debt with partial monthly payments. All debt which is not paid will be considered settled or forgiven by the IRS.

Penalties and interest will continue to accumulate during the PPIA payment period. It is always less expensive to make tax payments in full as soon as possible. The PPIA may be less expensive and less complicated than applying for an Offer in Compromise and it will also stop the IRS debt collection efforts such as bank levies, wage garnishment, and repossessions.  The IRS will review the Michigan taxpayer’s financial status every two years and if they are able, the IRS may require increased PPIA payments or completely cancel the PPIA agreement.

Currently Not Collectible

Under some conditions the IRS may determine tax debt is not collectible and change the tax debt status to “currently not collectible”. Michigan taxpayers whose debt is labeled currently not collectible can avoid IRS collection actions. Each year the IRS will send a notification to the taxpayer outlining the amount of debt owed. This notification is not considered a tax bill. If the IRS does not collect the tax debt within 10 years, the statute of limitations will expire on the debt and it will be forgiven.

Penalty Abatement

The IRS will penalize Michigan taxpayers for violating IRS tax regulations. Penalties may be assessed for failing to file a tax return, falsifying a refund request or providing inaccurate information on a tax return. Under certain conditions, the IRS may be willing to reduce or abate the penalties if Michigan taxpayers can provide a valid reason for the tax violation. Valid reasons for requesting penalty abatements may include: an environmental disasters, a personal crisis, a medical illness, or false tax information from a tax professional. The IRS may not lower or dismiss all penalties.

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Massachusetts taxpayers may be able to qualify for an IRS tax settlement offer and repay their IRS tax debt for a fraction of the full amount owed. The Internal Revenue Service (IRS) has the authority to collect federal taxes and may be willing to accept less than the total tax if doing so will allow taxpayers to meet all of their future tax obligations.

Failure to pay federal tax debt can result in wage garnishments, bank account levies or property repossessions. Any Massachusetts taxpayer who has become the target of aggressive IRS collection actions may want to contact a tax professional and discuss their IRS tax settlement options.

Offer in Compromise

Massachusetts taxpayers frequently use Offer in Compromise or OIC to settle IRS tax debt. OIC allows Massachusetts taxpayers to present an offer amount to the Internal Revenue Service. If the IRS decides to accept the Offer in Compromise, all the tax debt outlined in the offer will be settled (after all the OIC requirements have been met). Most of the OIC offers will not be accepted and taxpayers will not have legal recourse against the IRS.

Penalties and interest will continue to accrue while the Offer in Compromise is under consideration. If the OIC is accepted penalties and interest will stop accruing and all collection actions will cease. Offer in Compromise can be time consuming and difficult to implement. The IRS will request large amounts of detailed information which they can use against the Massachusetts taxpayer to continue their collection actions if the OIC is denied. Offer in Compromise is one of several IRS tax settlement options available and it is not always the best option.

Qualifying for Offer in Compromise

One of the following requirements must be met for a Massachusetts taxpayer to qualify for OIC:

• Doubt as to Liability- If there is some question about the validity or accuracy of the IRS tax which has been assessed against the Massachusetts taxpayer the IRS may be willing to accept an OIC.  Errors may occur if the IRS administrator made a miscalculation or if the taxpayer has additional tax information which has not been considered.  This condition does not frequently occur.
• Doubt as to Collectibility- The amount of IRS tax debt is not in question only the ability of the IRS to collect the IRS debt. An Offer in Compromise also may be accepted if the Internal Revenue Service has decided it is too expensive to collect the federal tax debt.
• Effective Tax Administration- Massachusetts taxpayers who can not pay IRS taxes because paying the debt would cause a “hardship which is inequitable or unfair” may receive an OIC. The handicapped and elderly most frequently qualify under this condition.

The following OIC requirements must also be met:

• All IRS tax debt must be paid before the federal deadline for the next five years.
• All of the OIC payments must be made.
• All federal tax forms and additional documentation must be submitted to the IRS by the federal tax deadline.

Installment Agreement

Installment agreements are the most popular method used to pay outstanding tax debt. The installment agreement will allow Massachusetts taxpayers to pay their tax debt in monthly installments. These installments will be for a specified period of time and the amount of time required to pay the debt can vary based on the amount of money owed. Taxpayers who owe $25,000 or less are generally able to qualify for an installment agreement. Taxpayers who owe more than $25,000 may want to talk to a tax professional. Tax professionals will be able to answer all of the taxpayer’s questions.

The IRS will cease all collection actions against the Massachusetts taxpayer during the installment agreement, but penalties and interest will continue to accrue. Massachusetts taxpayers who are able to make one lump sum payment should do so. It is always more expensive to use an installment agreement to pay IRS tax debt. Installment agreements can be terminated by the Internal Revenue Service if the Massachusetts taxpayer does any of the following:

• Does not make full installment payments or pays less than the agreed upon amount. The IRS may grant first time violators a 30-60 day grace period.
• Does not file a federal tax return each year.
• The Massachusetts taxpayer’s financial situation dramatically improves.
• Does not provide accurate financial information to the Internal Revenue Service for the installment agreement.
• If self-employed, does not submit tax returns each quarter or pay quarterly tax payments.
• Does not make all of their federal tax payments for the five years before the tax debt which can not be paid.
• The Massachusetts taxpayer can not have had another installment agreement within the last five years.

Partial Payment Installment Agreement

Massachusetts taxpayers who can not make full payments with an installment agreement or who do not qualify for an Offer in Compromise may qualify for a partial payment installment agreement or PPIA. The PPIA can be simple and cost less than an Offer in Compromise. The PPIA is similar to the installment agreement because the taxpayer will make monthly installment payments, but unlike the installment agreement, the PPIA will allow the taxpayer to make partial payments. Taxes not paid under the PPIA will be forgiven by the IRS.

Penalties and interest will continue to accumulate during the PPIA, but the IRS will cease all collection actions against the Massachusetts taxpayer. Every 2 years the IRS will review the financial status of the taxpayer and if it has improved, the PPIA can be modified or cancelled.

Currently Not Collectible

The IRS may determine certain debt is not currently collectible. If they make this determination the IRS will stop their collection efforts. Penalties and interest will continue to accrue. Every year the IRS will send a letter to the Massachusetts taxpayer identifying the total amount of debt assessed as currently not collectible. This written notice is not considered a bill. If the IRS fails to collect the tax debt within 10 years, the statute of limitations will expire and the tax will be forgiven.

Penalty Abatement

Penalties may be assessed against Massachusetts taxpayers who do not file a federal tax return, fail to pay all of their federal taxes, provide incorrect financial information to the IRS or request a false refund. If the Massachusetts taxpayer has a valid reason for their mistake or failure to file a return, the IRS may be willing to lower or abate the penalties. Valid reasons to request abatement could include: personal duress, poor mental or physical health, or poor tax professional advice.

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Nevada taxpayers who have IRS tax debt can use IRS tax settlement options to settle that debt often for a fraction of the total amount owed. The IRS has been give authority by the federal government to collect taxes and if necessary, initiate a variety of aggressive debt collection tactics such as wage garnishments or tax levies to force Nevada taxpayers to pay their tax debt.

Nevada taxpayers who have been harassed by the IRS can get help. The IRS may be willing to negotiate with taxpayers to avoid declaring debt currently not collectible or increasing the debt collection time period with an installment agreement. Contact a tax professional such as an enrolled agent, tax attorney or certified public accountant for help.

Offer in Compromise

Offer in Compromise or OIC is one of the most popular IRS tax settlement options available. Offer in Compromise allows the Nevada taxpayer to make an offer to the IRS. The IRS can choose to accept or deny the OIC offer. If the IRS accepts the offer, and the Nevada taxpayer meets the requirements of the OIC offer, the tax debt is considered settled. The IRS frequently will accept much less than the full amount of tax debt owed. Unfortunately, penalties and interest will continue to accumulate while the IRS is considering the Offer in Compromise.

The IRS currently accepts approximate 25% of the first time OIC offers it receives. More offers are accepted after negotiations or a more formal appeal is made by the Nevada taxpayer. Offer in Compromise is not a simple process and the IRS requests a large amount of financial information from the taxpayer. If the taxpayer’s offer is denied, the IRS can use the information they have gathered to continue their debt collection efforts.

Qualifying for Offer in Compromise

Requesting an Offer in Compromise will not be enough to ensure it is accepted. The IRS has certain criteria Nevada taxpayers must meet:

• Doubt as to Liability- Nevada taxpayers must prove the amount of tax liability they have been charged may be incorrect. If the IRS agrees they may be willing to accept an Offer in Compromise. The IRS does not frequently use this condition to grant an OIC.
• Doubt as to Collectibility- Under this condition the IRS doubts their ability to collect the outstanding tax debt. Unlike the first condition, the amount of liability is not in question, only the ability of the Internal Revenue Service to collect the tax debt.
• Effective Tax Administration- Nevada taxpayers who believe they will experience “an economic hardship which is unfair and inequitable” if they pay their federal tax debt may qualify for an Offer in Compromise. The elderly and handicapped most frequently meet this condition.

Nevada taxpayers applying for an OIC must also complete the following:

• Nevada taxpayers must pay all of their future IRS debt on or before the federal tax deadline for the next five years.
• All OIC requirements must be completed by the Nevada taxpayer.
• Nevada taxpayers must complete and submit all of their Internal Revenue Service tax returns by the federal tax deadline.

Installment Agreement

Nevada taxpayers also can use an installment agreement to pay their federal tax debt. Installment agreements allow the Nevada taxpayer to pay all of their tax debt with monthly installment payments. Nevada taxpayers with $25,000 or less in tax debt generally are able to qualify for an installment agreement which will allow them to pay their debt within 60 months. Nevada taxpayers with more than $25,000 in tax debt should consult with a tax professional that has experience negotiating an installment agreement. Interest and penalties continue to accrue until the full amount of tax debt is paid. It is always less expensive to make tax payments lump sums payment.

The Internal Revenue Service can terminate an installment agreement (IA) for any of the following reasons:

• The Nevada taxpayer does not pay their monthly tax payments.
• The Nevada taxpayer fails to file their tax returns.
• The Nevada taxpayer pays less than the agreed upon monthly payment amount.  The IRS may give first time violators a grace period of 30-60 days.
• The Nevada taxpayer’s financial condition improves.
• False or inaccurate tax information was provided to the IRS by the Nevada taxpayer during the installment agreement application process.

Nevada taxpayers who are applying for an installment agreement must meet the following requirements:

• All self-employed Nevada taxpayers must file quarterly tax returns and make quarterly federal tax payments.
• Nevada taxpayers must file all federal tax returns.
• Nevada taxpayers must pay their tax debt for the five years before the tax liability which can not be paid.
• Nevada taxpayers can not have made another IA with the IRS within the last five years.
• The IRS will review the Nevada taxpayer’s financial situation every two years.

Partial Payment Installment Agreement

Nevada taxpayers who can not pay all of their tax debt with an installment agreement may qualify for a partial payment installment agreement or PPIA. Under the partial payment installment agreement, the Nevada taxpayer may be able to pay their tax debt with partial monthly payments. If the IRS agrees to the terms of the PPIA, any debt which is not paid will be forgiven.

Nevada taxpayers may prefer a PPIA over Offer in Compromise because it can be less time consuming and complicated. Unfortunately, penalties and interest continue to accumulate under the PPIA, but the IRS will stop their debt collection actions against the taxpayer. The IRS will review all partial payment installment agreements every two years to determine if the plan can be terminated or revised. If the PPIA is revised, the Nevada taxpayer may have to increase the amount of their monthly payments. It is always less expensive to pay all tax debt at one time.

Currently Not Collectible

The IRS may consider debt they can not collect as “currently not collectible”. The IRS will discontinue debt collection efforts against Nevada taxpayers who have their debt reclassified as currently not collectible. Each year the IRS will send written notification to the Nevada taxpayer outlining how much debt they owe. This notification is not considered a bill. If the IRS fails to collect on tax debt within ten years the collection time will expire and the debt will be forgiven.

Penalty Abatement

Nevada taxpayers may be assessed tax penalties for a variety of reasons including: failing to file federal tax returns, making a request for a false refund or not reporting tax data correctly (either mistakenly or fraudulently). If the Nevada taxpayer can provide a valid reason for the error, the IRS may be willing to lower or abate the penalty. Valid reasons could include: incorrect advice from a tax professional, failing physical or mental health, personal duress, or disasters. Some penalties may not be dismissed or lowered.

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