The Internal Revenue Service or IRS has developed several IRS tax settlement options which Vermont taxpayers can use to repay their outstanding IRS tax debt. Several of these tax settlement options may allow the Vermont taxpayer to settle their IRS debt for a fraction of the full amount of tax owed.

Vermont taxpayers who have not paid their IRS tax debt could face aggressive IRS collection actions such as wage garnishments, property repossession or bank account levies. IRS tax settlement options may allow the taxpayer to stop or avoid these actions and meet their tax obligations. Vermont taxpayers who are considering an IRS tax settlement option should contact a tax professional (tax attorney, enrolled agent, certified public accountant) for help.

Offer in Compromise

Offer in Compromise is one of the most popular IRS tax settlement options available. Offer in Compromise can be complicated, expensive and difficult to implement, but it can allow the Vermont taxpayer to settle tax debt at a fraction of the amount owed. Offer in Compromise allows the taxpayer to make a settlement offer to the Internal Revenue Service. The IRS has sole authority to accept or reject the offer. The IRS will only accept the OIC offer if the Vermont taxpayer meets certain requirements and the IRS has determined the taxpayer is unable to repay their tax debt with a lump sum payment or with an installment agreement.

If the OIC is accepted, the tax debt outlined in the OIC agreement will be considered settled, penalties and interest will stop accruing and tax collection efforts will cease. Unfortunately if the OIC is denied, the detailed financial records the IRS has collected can be used to continue collection actions against the Vermont taxpayer.

The IRS denies up to 80% of first time OIC offers, but negotiations may be allowed to find a compromise settlement offer which the government and the Vermont taxpayer can both accept. If negotiations are not allowed, the Vermont taxpayer can file a formal appeal within 30 days from the date of the OIC denial letter.

Qualifying for Offer in Compromise

The IRS will not accept all Vermont taxpayer’s OIC offers. The Vermont taxpayer’s debt must meet one of the following conditions:

• Doubt as to Liability- The Offer in Compromise may be accepted if the IRS believes the amount of tax debt which has been charged against the taxpayer may be inaccurate. Errors in tax debt are rare, but could occur if there has been a miscalculation, misapplication of tax law or if the Vermont taxpayer has new tax information which the IRS has not considered.
• Doubt as to Collectibility- Under this condition the amount of federal tax debt which was charged is not in question, only the ability of the IRS to collect the tax debt. This condition may also be used if the IRS has determined it is too expensive to collect the IRS tax debt.
• Effective Tax Administration- In some cases, payment of IRS tax debt may cause a hardship which is inequitable or unfair. Under these conditions, the IRS may be willing to accept an Offer in Compromise. This condition is used most often for the handicapped or elderly.

Vermont taxpayers must also complete the following Offer in Compromise tasks:

• All federal tax debt must be paid to the IRS by the federal tax deadline for the next five years.
• All Offer in Compromise payments must be paid by Vermont taxpayers.
• All Offer in Compromise forms and information must be sent to the Internal Revenue Service.

Installment Agreement

Most taxpayers who owe federal tax debt use an installment agreement to repay their debt. Unlike the Offer in Compromise, the installment agreement will require all IRS tax debt to be repaid, but it can be less complicated, time consuming and expensive to implement. The installment agreement will also allow the Vermont taxpayer to make monthly installment payments instead of having to make a lump sum payment. The IRS has established criteria to determine the amount of time allowed to repay the IRS tax debt.

Vermont taxpayers who owe $25,000 or less can generally qualify for an installment agreement. Vermont taxpayers who owe $25,000 or more should contact a tax professional to discuss the best options for repayment. Penalties and interest will continue to collect during the installment agreement, but collection actions will cease. If a taxpayer wants to save money, it is better to avoid an installment agreement and make a one time lump sum payment.

The Internal Revenue Service can cancel an installment agreement for any of the following reasons:

• The Vermont taxpayer fails to make an installment payment or pays less than the full payment amount. The IRS may be willing to grant a grace period of 30-60 days for first time offenders.
• The Vermont taxpayer does not file a federal tax return each year.
• The Vermont taxpayer’s finances substantially improve.
• The Vermont taxpayer misrepresents their financial information on the installment agreement application.
• Self-employed Vermont taxpayers fail to file quarterly federal tax returns or to pay their quarterly federal tax payments.
• The Vermont taxpayer does not pay their federal taxes for the five years before the IRS tax debt which can not be paid.
• The Vermont taxpayer has had another installment agreement within the last five years.

Partial Payment Installment Agreement

Vermont taxpayers who do not want to use an Offer in Compromise or who can not make full tax payments with an installment agreement may be able to qualify for a partial payment installment agreement or PPIA. Like the installment agreement, the PPIA will allow the taxpayer to make monthly installment payments, but unlike an installment agreement, the PPIA allows partial payments. The debt not outlined in the PPIA will be forgiven.

PPIA will not stop interest and penalties from accruing on all outstanding IRS tax debt, but it will stop the IRS from trying to collect the tax debt. Every two years the IRS will review the Vermont taxpayer’s PPIA to determine if it is still needed or if the taxpayer’s finances have improved enough to cancel or restructure the PPIA.

Currently Not Collectible

Some Vermont taxpayers may not be able to make any size tax payments or use an IRS tax settlement option to settle their federal tax debt. If the IRS decides to change a taxpayer’s tax status to currently not collectible, they will cease all collection actions against the taxpayer. Unfortunately, penalties and interest will continue to accrue on all outstanding tax debt.

Every year the IRS will send written notice to the Vermont taxpayer outlining the amount of tax debt which is owed. The letter is not considered a tax bill. The IRS has ten years to try to collect the tax debt before the statute of limitations will expire and the debt will be forgiven.

Penalty Abatement

If a Vermont taxpayer has been fined penalties for a tax infraction such as failing to file a federal tax return, claiming a false refund or filing false financial information on a tax return, the IRS may be willing to lower or abate the penalties if a valid reason for the infraction is provided. Penalty abatement will be at the sole discretion of the IRS, but valid reasons could include: personal duress, incorrect professional tax advice or failing mental or physical health. The IRS may not be willing to lower all penalties. Vermont taxpayers who have penalties should contact a tax professional for help.

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The Internal Revenue Service or IRS has the authority not only to collect federal taxes to fund the federal government but to determine if they are willing to accept less than the full amount of taxes owed with an IRS tax settlement option. The IRS may be willing to accept much less than the full amount of tax debt if they do not believe a District of Columbia taxpayer will be able to repay their tax debt in one lump sum or with an installment agreement.

All District of Columbia taxpayers who have become the target of aggressive IRS debt collection actions such as wage garnishments, property repossession or bank account levies can contact a tax professional who can answer questions about IRS tax settlement options.

Offer in Compromise

Offer in Compromise or OIC is one of the most popular IRS tax settlement options available to District of Columbia taxpayers. Taxpayers can make an offer to the IRS which if accepted, will settle all of the tax debt outlined in the Offer in Compromise agreement. The OIC once accepted will stop penalties and interest from accruing and stop all collection actions.

Most Offer in Compromise offers will not be accepted, but the IRS may be willing to negotiate with District of Columbia taxpayers to find an offer which is acceptable to both parties. Offer in Compromise can be expensive and difficult to implement. An OIC will require detailed information to be sent to the IRS and if the OIC is not accepted, the IRS may use this information to continue their collection efforts. There are several IRS tax settlement options available and Offer in Compromise may not be the best option.

Qualifying for Offer in Compromise

Not all District of Columbia taxpayers will be eligible for Offer in Compromise. The Internal Revenue Service will only accept an OIC if the taxpayer meets one of the following conditions:

• Doubt as to Liability- If the accuracy of the tax debt is in question, the IRS may be willing to accept an Offer in Compromise. This condition does not frequently occur, but it is possible if there was a miscalculation or a misapplication of tax law.
• Doubt as to Collectibility- This condition differs from the first; the amount of debt owed is not in doubt, only the ability of the IRS to collect the tax debt.
• Effective Tax Administration- If the Internal Revenue Service determines a District of Columbia taxpayer may suffer an economic hardship which is inequitable or unfair by paying their IRS tax debt, the IRS may be willing to accept an Offer in Compromise. The elderly and the handicapped most frequently qualify for an OIC under this condition.

The following tasks must also be completed the taxpayer:

• All IRS tax debt must be paid by the federal tax deadline for the next five years.
• The District of Columbia taxpayer must meet their Offer in Compromise requirements.
• All IRS tax forms and tax returns must be completed and sent to the IRS by the federal tax deadline.

Installment Agreement

Installment agreements are another popular IRS tax settlement option for District of Columbia taxpayers to use to repay their IRS tax debt. An installment plan can be less expensive and time consuming than an Offer in Compromise. Installment agreements will require the taxpayer to pay all of their tax debt, but taxpayers will be able to repay the debt in monthly installment payments instead making a one time lump sum payment.

For District of Columbia taxpayers with IRS tax debt of $25,000 or less, the IRS will generally accept an installment agreement. The repayment period will vary depending on the amount of debt which must be repaid. District of Columbia taxpayers who owe more than $25,000 should contact a tax professional such as an enrolled agent, tax attorney or certified public accountant to discuss the best repayment options.

Installment agreements will stop IRS collectors from harassing taxpayers, but penalties and interest will continue to accumulate. District of Columbia taxpayers who want to save money should always pay their tax payments in one lump sum payment and avoid an installment agreement.

The IRS can revoke an installment agreement (IA) for any of the following reasons:

• If the District of Columbia taxpayer fails to make their monthly tax payments or if they pay less than the amount outlined in the installment agreement. The IRS may give first time violators 30-60 days to make payments.
• If the District of Columbia taxpayer does not file their federal tax returns.
• If the District of Columbia taxpayer provides false or inaccurate financial information to the Internal Revenue Service on the installment agreement application.

District of Columbia taxpayers also must complete the following:

• All self-employed District of Columbia taxpayers must file quarterly federal tax returns and make quarterly federal tax payments.
• All federal tax returns must be filed each year.
• District of Columbia taxpayers must pay their IRS tax debt for the five years before the tax liability which can not be paid.
• District of Columbia taxpayers can not have had another installment agreement with the IRS within the last 5 years.
• The IRS will review the District of Columbia taxpayer’s financial situation every two years.

Partial Payment Installment Agreement

There will be some District of Columbia taxpayers who do not qualify for an Offer in Compromise and can not pay the full amount of their tax debt with an installment agreement; these taxpayers may qualify for a partial payment installment agreement (PPIA).

The PPIA will allow the taxpayer to make partial installment payments. All IRS tax debt not included in the PPIA will be forgiven by the IRS. The PPIA will not stop penalties and interest from accruing, but the IRS will stop their collection actions (wage garnishments, repossession, bank account levies). Another benefit of the PPIA is that it can be less expensive, less time consuming and less complicated to implement.

The Internal Revenue Service will review the partial payment installment agreement every two years to determine if the taxpayer’s financial situation has improved. If it has, the IRS has the legal right to increase the PPIA payments or cancel the partial payment installment agreement.

Currently Not Collectible

There will be certain District of Columbia taxpayers who are not able to pay their federal tax debt. The IRS has the authority to declare their tax debt as currently not collectible. This debt status change will stop all collection actions against the District of Columbia taxpayer. Penalties and interest will continue to accumulate on all of the outstanding tax debt.

The IRS will send the taxpayer notice each year outlining their outstanding IRS tax debt. This notice is not considered a tax bill. The Internal Revenue Service has ten years to collect tax debt. If the IRS does not collect the tax debt before the statute of limitations expires, the IRS tax debt will be forgiven.

Penalty Abatement

District of Columbia taxpayers can be assessed penalties for failing to file a federal tax return, reporting incorrect financial information or requesting a false refund. If the District of Columbia taxpayer has a valid reason for the tax infraction, the IRS may reduce or cancel the penalty. Deteriorating mental or physical capacity, incorrect tax advice, natural disasters or personal duress could all be valid reasons. The IRS may refuse to dismiss all penalties and interest. District of Columbia taxpayers who have outstanding tax penalties may want to contact a tax professional to discuss penalty abatement.

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The Internal Revenue Service (IRS) has been given the authority by the federal government not only to collect taxes to fund government activities, but if necessary, to settle federal tax debt for less than the full amount owed. The IRS may be willing to negotiate a tax settlement if they believe the negotiations will allow the Iowa taxpayer to meet all future tax liability. Iowa taxpayers who owe IRS back taxes may have tax settlement options to eliminate the aggressive tactics of the IRS.

Iowa taxpayers who are interested in an IRS tax settlement option can contact a tax professional such as an enrolled agent, certified public accountant or tax attorney.

Offer in Compromise

Offer in Compromise or OIC is used by many Iowa taxpayers to settle IRS tax debt. Offer in Compromise allows the Iowa taxpayer to make an offer to the IRS for generally less than the full amount owed. If the IRS accepts the offer, it is considered a compromise settlement and the amount outlined in the OIC will be settled. Penalties and interest continue to accrue until the OIC is accepted.

The Internal Revenue Service will not accept all offers. Negotiations and appeals may be necessary to help all parties find an OIC amount which is acceptable. Offer in Compromise can be complicated and expensive. The IRS may request large amounts of detailed financial data which can be used to continue debt collection if the Offer in Compromise offer is denied. Offer in Compromise is one of several IRS tax settlement options and it may not be the best option for all Iowa taxpayers.

Qualifying for Offer in Compromise

Iowa taxpayers must prove one of the following conditions for the IRS to consider accepting the Offer in Compromise offer:

• Doubt as to Liability- This condition assumes there might be a discrepancy in the amount of debt calculated. This can occur if the IRS made a calculation error or if the taxpayer has new information concerning their debt. This condition is seldom used.

• Doubt as to Collectibility- Under this condition there is not a question about the amount of tax debt owed, only the ability of the IRS to collect the debt.

• Effective Tax Administration- If an Iowa taxpayer can prove that paying their tax debt could cause “an economic hardship which is unfair and inequitable” they may qualify for an Offer in Compromise. The elderly and handicapped most frequently meet this condition.

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

• Iowa taxpayers must pay all of their IRS tax debt on or before the federal tax deadline for the next 5 years.

• All Offer in Compromise requirements must be paid by the Iowa taxpayer.

• Iowa taxpayers must submit all of their Internal Revenue Service tax returns on or by the federal tax deadline.

Installment Agreement

Iowa taxpayers who do not qualify for an Offer in Compromise or who want an IRS tax settlement plan which is less time consuming or less expensive can use an installment agreement. With an installment agreement, the Iowa taxpayer makes monthly installment payments to repay all of their tax debt. Iowa taxpayers who owe $25,000 or less in tax liability may be able to use an installment agreement to pay their outstanding tax debt within 60 months. Iowa taxpayers who owe more than $25,000 should contact a tax professional to discuss the best option for settling their IRS debt. The IRS will stop their collection efforts during the installment agreement, but interest and penalties will continue to accrue. To reduce the amount of taxes paid, it is always best to pay all tax debt in one lump sum payment.

The IRS can revoke an installment agreement (IA) for any of the following reasons:

• The Iowa taxpayer fails to make all of their monthly tax payments.

• The Iowa taxpayer does not file their tax returns.

• The Iowa taxpayer pays less than the required monthly payment amount. The IRS may give first time violators 30-60 days to make payments.

• The Iowa taxpayer’s financial condition substantially improves.

• False or inaccurate financial information was provided to the Internal Revenue Service by the Iowa taxpayer during the installment agreement application process.

Iowa taxpayers who are applying for an IA must meet all of the following requirements:

• All self-employed Iowa taxpayers must file quarterly federal tax returns and make quarterly tax payments.

• Iowa taxpayers must submit all of their federal tax returns.

• Iowa taxpayers must pay their federal tax debt for the 5 years before the tax liability which can not be paid.

• Iowa taxpayers can not have made another installment agreement with the Internal Revenue Service within the last 5 years.

• The Internal Revenue Service will review the Iowa taxpayer’s financial situation every 2 years.

Partial Payment Installment Agreement

Another popular method to settle IRS tax debt is the partial payment installment agreement (PPIA). The PPIA allows Iowa taxpayers who can not pay all of their IRS debt to make partial monthly installment payments. If the IRS accepts the PPIA plan, all debt not paid will be forgiven. Many Iowa taxpayers choose the PPIA over the Offer in Compromise because it can be less complicated, less expensive and less time consuming.

One benefit of the PPIA is that the IRS will cease all collection efforts including: wage garnishment, bank levies, and repossessions. Penalties and interest will continue to accrue during the payment period. The partial payment installment agreement will be reviewed every two years by the IRS to determine if the taxpayer’s financial situation has changed. The IRS may increase the Iowa taxpayer’s monthly payments or completely cancel the PPIA.

Currently Not Collectible

If the IRS determines that an Iowa taxpayer’s debt is not collectible they may change the debt status to “currently not collectible”. Under this status, debt collection efforts will cease. The IRS will send written notification each year to the Iowa taxpayer detailing the amount of tax debt owed. This notification is not considered a tax bill. If the IRS fails to collect the debt within 10 years, the collection time will expire and the IRS tax debt will be forgiven.

Penalty Abatement

The IRS may fine tax penalties to an Iowa taxpayer for a series of tax infractions including: not filing a tax returning, reporting incorrect tax data, or requesting a false refund. There may be a valid reason for the error and if this is the case, the IRS may be willing to reduce or eliminate the penalty. Valid reasons could include: false information from a tax professional, deteriorating mental or physical health, or natural disasters. The IRS may not be willing to lower or dismiss all penalties. A tax professional can help evaluate penalties and negotiate penalty abatement with the IRS.

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There are a variety of IRS tax settlement options available for Maine taxpayers who have outstanding federal tax debt and if the taxpayer uses one of these programs, the IRS may be willing to except far less than the total amount owed. The IRS believes that Maine taxpayers who can eliminate back tax debt are far more likely to be able to meet all future tax obligations.

The IRS has the authority to collect all outstanding tax debt. If Maine taxpayers fail to pay their debt they could become the target of aggressive IRS tax collection efforts. The IRS is authorized to use wage garnishments, property repossession, and bank levies to force Maine taxpayers to pay outstanding taxes. All Maine residents who are facing harassment by the IRS or who would like more information about available tax settlement options can contact a tax professional for help.

Offer in Compromise

Offer in Compromise or OIC is one of the most common IRS tax settlement options available for taxpayers. Maine taxpayers can use Offer in Compromise to make an offer to the Internal Revenue Service to settle IRS tax debt. The IRS can agree to the settlement amount or they can reject the offer. If the Internal Revenue Service accepts the OIC and the Maine taxpayer fulfills the requirements of the agreement, the tax debt will be considered settled.

The IRS will not accept all Offer in Compromise offers, in fact, they may deny up to 80% of all initial offers. Maine taxpayers may be able to negotiate with the IRS or make a formal appeal. The OIC will stop all collection actions by the IRS, but interest and penalties will continue to accumulate until the OIC is accepted.

Offer in Compromise may be time consuming, expensive and difficult to implement. Large amounts of detailed information may be requested by the IRS. If the IRS denies the OIC offer they can use the information they have collected to continue their collection efforts. Offer in Compromise is only one of several IRS tax settlement options available, and it may not be the best one for all Maine taxpayers.

Qualifying for Offer in Compromise

Maine taxpayers must meet one of the following requirements to qualify for an Offer in Compromise:

• Doubt as to Liability- The IRS may accept an OIC offer if they believe the debt assessed may be incorrect. This can occur through a miscalculation or if the taxpayer has additional tax information to offer the IRS. This condition is not frequently used.
• Doubt as to Collectibility- The IRS may accept an OIC offer if they believe they may not be able to collect the IRS tax debt either now or in the future. The IRS may also believe collecting the tax debt will be too expensive.
• Effective Tax Administration- Certain Maine taxpayers who are unable to pay their tax debt because it could cause a “hardship which is inequitable or unfair” may qualify for an Offer in Compromise. The handicapped and elderly most frequently qualify under this condition.

The following tasks will also need to be completed for an Offer in Compromise:

• All federal tax debt must be pay before the federal deadline for the next 5 years.
• All of the requirements outlined in the OIC must be completed.
• All tax returns must be completed and submitted to the IRS by the federal tax deadline.

Installment Agreement

An installment agreement is another tax settlement option available for Maine taxpayers to settle IRS tax debt. An installment agreement allows the taxpayer to pay the full amount of tax debt they owe monthly. For Maine taxpayers who owe $25,000 or less, it is generally not too difficult to qualify for an installment agreement but the tax debt must be paid within 60 months.

Maine taxpayers who have IRS tax debt exceeding $25,000 should contact a tax professional for help negotiating a favorable installment agreement. An installment agreement will not stop penalties and interest from accruing, but it will stop the IRS from trying to collect the tax debt. It is always less expensive to pay IRS tax debt as soon as possible without a protracted installment agreement.  The IRS reviews installment agreements every two years and can cancel the installment agreement for any of the following reasons:

• Failing to pay the monthly installment payments.
• Failing to submit federal tax returns each year.
• Failing to pay the full amount of taxes due each month. First time violators may be granted a 30-60 day grace period.
• The financial situation of the Maine taxpayer substantially improves.
• Failing to provide correct financial information to the IRS when applying for the installment agreement.

The following tasks must also be completed:

• Self-employed Maine taxpayers must file and pay quarterly tax payments.
• Maine taxpayers must file federal tax returns each year.
• Maine taxpayers must pay all federal taxes for the 5 years before the IRS debt which can not be paid.
• Maine taxpayers can not have had another installment agreement with in the last five years.

Partial Payment Installment Agreement

Maine taxpayers who do not qualify for an OIC or who can not pay their full debt with an installment agreement may be able to settle their IRS tax debt with a partial payment installment agreement or PPIA. The PPIA allows Maine taxpayers to make partial monthly installment payments. The IRS will forgive the amount which is not paid under the PPIA. The PPIA can also be less difficult, less expensive and less time consuming to implement than an OIC.

Partial payment installment agreements will not stop interest and penalties from accruing on outstanding tax debt. The PPIA will be reviewed every 2 years by the IRS and can be modified or cancelled if the IRS believes the taxpayers finances have improved.

Currently Not Collectible

Certain Maine taxpayers will not be able to pay their tax debt for a variety of reasons. If the IRS agrees, they may change the status of their tax debt to “currently not collectible”. The currently not collectible status will not stop penalties and interest from accumulating, but it will stop the IRS from attempting to collect the tax debt.

The IRS will send written notification to Maine taxpayers each year outlining the amount of tax debt which is considered currently not collectible. This notice is not a tax bill. The Internal Revenue Service has ten years to collect all outstanding tax debt before the statute of limitations expires and the debt is forgiven.

Penalty Abatement

Penalties may be charged against Maine taxpayer for failing to report their financial information accurately, failing to file a tax return or requesting a false refund. The IRS may be willing to abate or lower penalties they have assessed against Maine taxpayers for certain reasons. Personal duress, health conditions, natural disasters or poor tax advice may all qualify as valid reasons. The IRS may not be willing to abate all penalties.

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The Internal Revenue Service (IRS) has created a variety of programs Kansas residents can use to settle federal tax debt. The United States federal government has given the IRS the authority to collect taxes and if necessary, to settle tax debt with taxpayers at a fraction of the total amount of debt owed. The Internal Revenue Service may be willing to settle debt to avoid declaring the debt currently not collectible or delaying payment of the IRS debt with a protracted installment agreement.

Kansas taxpayers who are considering a tax settlement option may want to contact a tax professional such as a tax attorney, enrolled agent or certified public accountant who understands the pros and cons of each plan and can help the Kansas taxpayer determine the best option.

Offer in Compromise

Kansas taxpayers may be able to use Offer in Compromise to settle their tax debt for a fraction of the total amount. Offer in Compromise allows Kansas taxpayers to make an “offer” to the IRS. The offer may be accepted or rejected. If the IRS considers the offer reasonable, it will accept the “compromise” and all taxes outlined in the Offer in Compromise agreement will be considered settled after the taxpayer meets the OIC requirements.

The IRS has sole discretion to refuse an OIC offer and they do so approximately 80% of the time. Continued negotiations frequently will yield an acceptable offer for both the government and Kansas taxpayers. Offer in Compromise can be expensive, time consuming and expensive. Unfortunately, if the OIC offer is refused and negotiations fail, the IRS can use all of the taxpayer’s financial data they have gathered to continue their aggressive collection efforts.

Qualifying for Offer in Compromise

Not all Kansas taxpayers will have a valid reason for an Offer in Compromise. To qualify for an OIC, Kansas taxpayers must meet one of the following criteria:

• Doubt as to Liability- Kansas taxpayers who doubt the amount of tax liability they have been assessed may be able to qualify under this condition. This condition is not frequently used.
• Doubt as to Collectibility- Under certain conditions the IRS may determine it is unlikely or too expensive to collect a Kansas taxpayer’s federal tax debt.  If they believe this is the case, the IRS may accept an Offer in Compromise. This condition differs from the first in that the amount of IRS tax debt is not in doubt, only the ability of the Internal Revenue Service to collect the debt.
• Effective Tax Administration- Kansas residents who may suffer “an economic hardship which is unfair and inequitable” if they pay their federal tax debt may qualify for an Offer in Compromise. This condition is most frequently used for the elderly and the handicapped.

Kansas taxpayers must also complete the following tasks:

• All future IRS tax debt must be paid on or before the federal tax deadline for the next five years.
• Offer in Compromise requirements must be completed.
• Kansas taxpayers must complete and submit all of their IRS tax returns by the federal tax deadline.

Installment Agreement

The most popular IRS tax settlement option available to settle outstanding tax debt is the installment agreement. Kansas taxpayers can use an installment agreement or IA to repay all of their IRS tax debt in monthly installments. Kansa taxpayers who owe $25,000 or less can usually qualify for an IA to pay all of their IRS tax debt within 60 months.

Kansas taxpayers who owe more than $25,000 may want to discuss their installment options with a tax professional that has the expertise needed to negotiate an installment agreement with the IRS. It is always less expensive to pay all taxes, penalties and interest in one lump sum payment. Penalties and interest will continue to accrue throughout the installment agreement.

An installment agreement can be terminated by the IRS for any of the following reasons:

• Failing to make all the required IA payments (either partial or full). First time offenders may have a grace period of 30-60 days before the installment agreement is terminated.
• Failing to file federal tax returns
• A taxpayer’s financial situation greatly improves. (The IRS can review the IA every two years.)
• A Kansas taxpayer provides inaccurate information on the installment agreement application.

Kansas taxpayers who are applying for an installment agreement must meet the following conditions:

• All self-employed Kansas taxpayers must file quarterly tax returns and pay quarterly tax payments.
• Kansas taxpayers must file federal tax returns.
• Kansas taxpayers must pay federal tax debt for the 5 years before the tax liability which can not be paid.
• Kansas taxpayers can not have had another installment agreement with the Internal Revenue Service with in the last 5 years.

Partial Payment Installment Agreement

Due to financial conditions, certain Kansas residents will not be able to settle their IRS tax debt with an installment agreement and may not qualify for an Offer in Compromise. A partial payment installment agreement (PPIA) is another option available to taxpayers to make partial monthly payments for tax debt. The PPIA will not pay the full amount of the tax debt and the taxes not paid will be considered forgiven by the Internal Revenue Service.

Partial payment installment agreements are popular because they are less complicated, less time consuming and less expensive than an OIC. Kansas taxpayers who use the PPIA will avoid IRS collections, but penalties and interest on the IRS tax debt will continue to accrue. The IRS will review the PPIA every 2 years and if the Kansas taxpayer’s financial situation has improved, the PPIA may be cancelled or revised. Paying a lump sum payment for all tax debt is always less expensive than any type of installment agreement.

Currently Not Collectible

The Internal Revenue Service may decide some debt can not be collected. Kansas residents who can not pay their tax debt may have their debt categorized as currently not collectible. Currently not collectible will stop all IRS tax collection actions including tax levies and wage garnishments. The Internal Revenue Service will send a written notification each year listing the amount of outstanding tax debt. This is not a tax bill. If after ten years the IRS has failed to collect the tax debt, the time limit for collections will expire and the debt will be forgiven.

Penalty Abatement

The Internal Revenue Service may assess penalties for a variety of taxpayer infractions including but not limited to: failing to file a tax return, claiming a false refund, or inaccurately reporting tax information. Penalties are abated or reduced for valid reasons only such personal duress, disasters, inaccurate tax advice from a tax professional or failing health. The IRS may not be willing to abate all penalties.

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Idaho taxpayers who have been unable to pay their federal taxes can now find relief with a series of IRS tax settlement options which have been created by the Internal Revenue Service. The goal of the IRS tax settlement options is to help taxpayers settle their back taxes in hopes that they will be able to meet all of their future tax obligations.

The federal government has given the IRS the authority not only to collect taxes but also, in many cases, accept far less than the taxpayer owes to settle tax debt. Idaho taxpayers who fail to pay their IRS tax debt may become the target of aggressive collection actions by the IRS including: wage garnishment, repossession or bank levies. There are a variety of IRS tax settlement options and Idaho residents should contact a tax professional for more information.

Offer in Compromise

One of the most common IRS tax settlement options is Offer in Compromise (OIC). Idaho taxpayers that owe the IRS back taxes can make an offer to the IRS to settle their debt. The IRS has sole authority to accept or deny the offer. If the IRS accepts the offer, it is considered a “compromise” and all taxes outlined in the OIC are considered settled.

Most OIC offers will be denied but additional negotiations or appeals are allowed. The IRS will stop all collection efforts if the OIC is accepted, but penalties and interest will continue to accrue. Offer in Compromise can be a difficult and time consuming process. The IRS will ask for a large amount of taxpayer records and these records can be used to continue collections if the OIC is denied. Offer in Compromise is not the only IRS tax settlement option and it may not be the best one for all Idaho taxpayers who have outstanding tax debt.

Qualifying for Offer in Compromise

Not all Idaho taxpayers who request an Offer in Compromise will qualify for one. The IRS will only accept an OIC offer if the Idaho taxpayer meets the following conditions:

• Doubt as to Liability- There has been a potential error in calculation of the Idaho taxpayer’s taxes. The error could have been made by the IRS or the taxpayer may be able to provide additional information to prove their taxes are incorrect. This does not frequently occur.
• Doubt as to Collectibility- The IRS does not believe the Idaho taxpayer’s tax debt will be collectible either now of in the future or the IRS has assessed the cost of collecting the tax debt and has determined it is too high. The amount of tax debt is not in question, only the ability of the IRS to collect the debt.
• Effective Tax Administration- If an Idaho taxpayer is unable to pay their tax debt because it could cause a “hardship which is inequitable or unfair”, the IRS may accept an OIC offer. The handicapped and elderly most frequently qualify under this condition.

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

• Tax debt must be paid before the federal deadline for the next five years.
• Idaho taxpayers must comply with all outlined requirements of the Offer in Compromise.
• All federal tax returns must be completed and submitted to the IRS by the deadline.

Installment Agreement

If an Idaho taxpayer does not qualify for an Offer in Compromise or if they want to use an IRS tax settlement option which may be simpler to implement, they can use an installment agreement. Installment agreements allow taxpayers to pay their federal back taxes over a specified time period.

The IRS generally accepts an installment agreement for Idaho taxpayers who owe $25,000 or less in federal back taxes as long as the amount is paid within 60 months. If an Idaho taxpayer owes more than $25,000 it is recommended that they contact a tax professional.

Penalties and interest will not stop during the installment period. The IRS will however, stop their collections against the taxpayer. It is always less expensive to pay all IRS tax debt in one lump sum. The installment agreement can be cancelled for a variety of reasons including:

• Idaho taxpayers do not pay the agreed upon monthly installment payments.
• Idaho taxpayers do not file their federal tax returns.
• If a taxpayer pays less than the amount due for the installment agreement. In some cases the IRS may give first time violators 30-60 days to pay.
• If the Idaho taxpayers financial situation improves substantially.
• If the Idaho taxpayer provides false information to the IRS in the installment application process.

Idaho taxpayers must also complete the following:

• All self-employed workers must file quarterly federal tax returns and make quarterly federal tax payments.
• Idaho taxpayers must file all of their tax returns each year.
• Idaho taxpayers must pay their taxes for the five years before the IRS debt which can not be paid.
• Idaho taxpayers can not have had another installment agreement with in the last five years with the Internal Revenue Service.
• The IRS will review the Idaho taxpayer’s finances every two years.

Partial Payment Installment Agreement

Idaho taxpayers who can not qualify for OIC or who can not make full installment payments may be able to repay tax debt with a partial payment installment agreement or PPIA. The partial payment installment agreement does not require the full payment for IRS debt but will instead allow the taxpayer to make partial monthly payments. The tax debt which is not part of the PPIA will be considered forgiven. The PPIA may be easier, less costly and less complicated to use than an OIC.

Penalties and interest will continue to accrue during the PPIA period, but the IRS will cease collection efforts against the taxpayer. The PPIA will be reviewed every 2 years by the Internal Revenue Service. If the Idaho taxpayer’s finances substantially improve the PPIA may be terminated or modified.

Currently Not Collectible

Under certain conditions, the IRS may believe they will not be able to collect an Idaho taxpayer’s tax debt. If the IRS makes this determination, they will change the tax status to currently not collectible. Penalties and interest will continue to accrue, but the Internal Revenue Service will not try to collect the debt.

The IRS will send the Idaho taxpayer written notice each year documenting the debt. This notice is not considered a bill. The IRS has ten years to collect the debt or the statute of limitations will expire.

Penalty Abatement

Idaho taxpayers who do not pay their taxes, request a false refund or who report incorrect financial information on their tax return may be assessed penalties. The IRS may be willing, under certain conditions, to abate or lower the penalties. Taxpayers must have a valid reason to request penalty abatement. Valid reasons may include: personal duress, natural disaster, mental or physical health issues or incorrect advice from a tax profession. The IRS may not be willing to abate all penalties.

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