IRS Settlement

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Wyoming IRS Tax Settlement Options

The IRS offers a variety of IRS tax settlement options which may allow Wyoming taxpayers to repay their tax debt for a fraction of the full amount owed. The federal government has given the Internal Revenue Service (IRS) sole authority to determine how much money they are willing to accept to settle IRS tax debt. The IRS will only accept less than the full amount of tax owed if they do not believe the taxpayer can pay the IRS tax debt with a lump sum payment or an installment agreement.

Wyoming taxpayers who do not pay their federal tax debt can become the target of aggressive IRS collection actions and may face bank account levies, property repossession or wage garnishments. It is not a good idea to ignore the IRS. Wyoming taxpayers who want more information about how they can settle their IRS tax debt can contact a tax professional for help.

Offer in Compromise

Offer in Compromise is one of the most popular IRS tax settlement options available. Offer in Compromise may allow a taxpayer to make a settlement offer to the IRS to settle their IRS tax debt for a fraction of the full amount owed. The IRS can deny, accept or negotiate the Offer in Compromise offer. If the Offer in Compromise is accepted, the amount outlined in the OIC agreement will be considered settled. The IRS currently accepts approximate 20% of the OIC offers it receives (more may be accepted after negotiations or on appeal). Wyoming taxpayers will not have any legal recourse to compel the IRS to accept an OIC offer if all OIC appeals have been exhausted.

After the OIC is accepted penalties and interest will stop accruing and the IRS will stop their collection actions. An Offer in Compromise can be expensive, time consuming and difficult to implement. The IRS will also need large amounts of detailed information to process the OIC and if it is denied, they can use this information to continue to collect the tax debt. Offer in Compromise may allow the Wyoming taxpayer to settle their IRS tax debt for a fraction of the amount owed, but it may not be the best IRS tax settlement option for all Wyoming taxpayers.

Qualifying for Offer in Compromise

Not all Wyoming taxpayers who request an Offer in Compromise will be eligible for one. Taxpayers must meet one of the following:

  • Doubt as to Liability- An Offer in Compromise will be accepted if there is some doubt as to the amount of tax debt assessed against the taxpayer. Errors can result from a miscalculation, misapplication of federal tax law or if the taxpayer provides additional tax information which has not previously been considered.
  • Doubt as to Collectibility- Under this condition the amount of IRS tax debt is not in question, only the ability of the IRS to collect the debt. An OIC also may be granted under this condition if the IRS has determined it is too expensive to collect the tax debt.
  • Effective Tax Administration- Wyoming taxpayers who may suffer a hardship which is inequitable or unfair may receive an Offer in Compromise. This condition is most frequently used for the handicapped and the elderly.

The Wyoming taxpayer must also meet the following requirements:

  • Taxpayers must pay all IRS tax debt before the federal deadline for the next five years.
  • Taxpayers must make their Offer in Compromise payments.
  • Taxpayers must submit their federal tax forms and additional documentation to the IRS by the federal tax deadline.

Installment Agreement

Most taxpayers use installment agreements to repay their IRS tax debt. Installment agreements allow the Wyoming taxpayer to pay all of their IRS tax debt in monthly installment payments. Installment agreements will be for a specified time period which will vary based on the amount of tax which is owed.

Wyoming taxpayers who owe $25,000 or less can generally qualify for an installment agreement. Wyoming taxpayers who owe $25,000 or more should contact a tax professional (certified public accountant, tax attorney or enrolled agent) for help negotiating with the IRS.

Installment agreements will not stop penalties and interest from accruing on the outstanding tax debt, but will stop the IRS from continuing their collection actions. It is always less expensive to pay tax debt with a one time lump sum payment if possible. The IRS has the authority to cancel an installment agreement for many reasons including any of the following:

  • Wyoming taxpayers do not make their full installment payments or they pay less than the agreed upon amount. First time violators may be granted a 30-60 day grace period.
  • Wyoming taxpayers fail to file a federal tax return each year.
  • Wyoming taxpayer’s financial situation dramatically improves.
  • Wyoming taxpayers provide inaccurate financial information to the Internal Revenue Service on the installment agreement application.
  • Self-employed Wyoming taxpayers fail submit tax returns each quarter or pay quarterly tax payments.
  • Wyoming taxpayers did not make their federal tax payments for the five years before the tax debt which can not be paid.
  • Wyoming taxpayers have had another installment agreement within the last five years.

Partial Payment Installment Agreement

If a Wyoming taxpayer does not qualify for an Offer in Compromise or can not make the full installment payments with an installment agreement, they may be able to repay IRS tax debt with a partial payment installment agreement or PPIA. The PPIA is simple, less expensive and easier to use than an Offer in Compromise. The PPIA will stop all collection actions, but it will not stop penalties and interest from accruing on outstanding tax debt.

The PPIA, like the installment agreement, will allow the taxpayer to repay tax debt with monthly installment agreements, but unlike the installment agreement, the PPIA will allow the Wyoming taxpayer to make partial payments each month. The IRS must agree to the plan, and if they do, all the debt not included in the PPIA will be considered settled.

The PPIA will be reviewed by the IRS every 2 years and if the Wyoming taxpayer’s financial situation has substantially improved, the IRS may require the taxpayer to pay more each month or completely cancel the PPIA.

Currently Not Collectible

Certain Wyoming taxpayers may have outstanding IRS tax debt which they are not able to repay. If the IRS agrees, they may change the tax status to “currently not collectible”. This tax status will stop all collection actions against the taxpayer but will not stop penalties and interest from continuing to accrue.

The IRS will send written notification each year to the Wyoming taxpayer updating them on their tax status, but this notice is not considered a tax bill. The IRS has 10 years to collect all tax debt before the statute of limitations expires and the debt is forgiven.

Penalty Abatement

Wyoming taxpayers may be assessed tax penalties if they fail to file a tax return, do not pay their taxes, misrepresent their tax information or request a false refund. The IRS may, with a valid reason, be willing to abate or lower a Wyoming taxpayer’s penalties. Valid reasons might include: personal duress, poor physical or mental health or bad professional tax advice.

The IRS may not be willing to lower all penalties. Wyoming taxpayers who need more information about penalty abatement should contact a tax professional for help.

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IRS Tax Settlement Options For Kentucky Taxpayers

Kentucky taxpayers who want to settle IRS tax debt may be able to use an IRS tax settlement option. The United States federal government has given the Internal Revenue Service (IRS) the legal authority to collect federal taxes for a fraction of the full amount owed.

Kentucky taxpayers who fail to pay IRS tax debt may face wage garnishments, repossessions or bank account levies. IRS tax settlement options may allow a taxpayer to repay their debt and avoid debt collection. The Internal Revenue Service may be willing to negotiate with a Kentucky taxpayer to avoid declaring debt currently not collectible or agreeing to a protracted installment agreement.

Kentucky taxpayers who need information about IRS tax settlement options can contact a tax professional such as an enrolled agent, certified public accountant or tax attorney.

Offer in Compromise

Offer in Compromise is one type of IRS tax settlement option available for Kentucky taxpayers. Kentucky taxpayers can make an “offer” to the Internal Revenue Service to settle their IRS tax debt. If the Internal Revenue Service agrees to the compromise amount and all of the requirements of the Offer in Compromise are met, the federal tax debt will be considered settled. Under certain conditions, the Internal Revenue Service may be willing to accept less than the total amount of federal tax owed.

Approximately 80% of first time Offer in Compromises are declined by the Internal Revenue Service. The IRS may be willing to continue negotiations with Kentucky taxpayers to find an amount which is agreeable to the federal government and the taxpayer. Offer in Compromise can be time consuming, expensive and complicated. The IRS will request a substantial amount of financial data to process the Offer in Compromise agreement and if the OIC is denied, the Internal Revenue Service can use this information to continue their debt collection efforts.

Qualifying for Offer in Compromise

Not all Kentucky taxpayers with IRS tax debt will be able to qualify for an Offer in Compromise. Offer in Compromise may be accepted by the Internal Revenue Service for the following reasons:

  • Doubt as to Liability- Kentucky residents may have questions about the amount of tax liability they have been assessed. If the IRS agrees, they may be willing to grant an Offer in Compromise. This condition is not frequently met.
  • Doubt as to Collectibility- The Internal Revenue Service may accept an Offer in Compromise if they believe they will not be able to collect federal tax debt. This is not the same as the first condition in that the amount of tax debt owed is not in question, only the ability of the IRS to collect the tax debt.
  • Effective Tax Administration- Kentucky taxpayers who believe they will experience “an economic hardship which is unfair and inequitable” if they pay their IRS tax debt may qualify for an Offer in Compromise. This condition is most frequently met for the elderly and the handicapped.

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

  • Kentucky taxpayers will have to pay all of their future IRS tax debt on or before the federal tax deadline for the next 5 years.
  • All the Offer in Compromise requirements must be completed by the Kentucky taxpayer.
  • Kentucky taxpayers must fill out and complete all of their Internal Revenue Service tax returns by the federal tax deadline.

Installment Agreement

The most popular method used by taxpayers to settle IRS tax debt is the installment agreement. With an Installment Agreement or IA the IRS can make monthly installment payments to repay federal tax debt. Kentucky taxpayers with tax debt of $25,000 or less can generally get an installment agreement and repay their debt over 60 months. Kentucky taxpayers who owe more than $25,000 should talk to a tax professional that has the expertise to negotiate the best installment agreement possible. Penalties and interest will accrue for the entire duration of the installment agreement. Paying all federal tax debt in one lump sum is always less expensive than an installment agreement.

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

  • If the Kentucky taxpayer fails to pay the monthly tax payments or file tax returns.
  • If the Kentucky taxpayer pays less than the agreed upon monthly payment amount.  First time violators may be granted a 30-60 day grace period.
  • If a Kentucky taxpayer’s financial condition improves.
  • If a Kentucky taxpayer provides false or inaccurate tax information to the IRS during the installment agreement application process.

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

  • All self-employed Kentucky taxpayers must file quarterly IRS tax returns and make quarterly estimated federal tax payments.
  • Kentucky taxpayers must submit all federal tax returns.
  • Kentucky taxpayers must pay their IRS tax debt for the 5 years before the tax liability which can not be paid.
  • Kentucky taxpayers can not have made another installment agreement with the Internal Revenue Service with in the last 5 years.
  • The IRS will perform a review of the Kentucky taxpayer’s financial situation every two years.

Partial Payment Installment Agreement

Kentucky taxpayers who do not qualify for an Offer in Compromise or who can not pay their full amount of tax debt may be able use a partial payment installment agreement or PPIA. Partial payment installment agreements differ from an installment agreement by allowing the Kentucky taxpayer to repay their tax debt with partial monthly payments. Any debt which is not paid will be forgiven by the IRS.

Partial payment installment agreements can be less complicated, less expensive and less time consuming that an OIC agreement. Penalties and interest will continue to accrue during the PPIA period, but the IRS will stop their collection actions such as wage garnishments and bank account levies. The partial payment installment agreement will be reviewed by the Internal Revenue Service every two years and if the Kentucky taxpayer’s financial situation improves the PPIA payments may be increased or the plan may be terminated. It is always more cost effective to pay all IRS tax debt with one lump sum payment.

Currently Not Collectible

Tax debt not paid by the Kentucky taxpayer may be determined “currently not collectible”. Currently not collectible will stop all Internal Revenue Service collection tactics such as tax levies and wage garnishments. Notice will be sent each year to the Kentucky taxpayer outlining tax debt owed. This notice is not considered a tax bill. The expiration for the Internal Revenue Service to try and collect the tax debt is ten years.

Penalty Abatement

The Internal Revenue Service may assess the Kentucky taxpayer penalties for a variety of tax infractions including but not limited to: failure to file a federal tax return, requesting a false refund or reporting inaccurate tax data. The Internal Revenue Service may be willing to abate or reduce a tax penalty if the Kentucky taxpayer can provide a valid reason for the abatement. Valid reasons may include: personal duress, environmental disasters, inaccurate tax professional filings or failing physical health. The Internal Revenue Service may not be willing to dismiss or lower all penalties.

Vermont IRS Tax Settlement Options

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.

IRS Tax Settlement Options In Iowa

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.

Kansas IRS Tax Settlement Options

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.

West Virginia IRS Tax Settlement Options

West Virginia taxpayers who have outstanding IRS tax debt and who are facing aggressive IRS collection actions may be able to settle their tax debt with an IRS tax settlement option. West Virginia taxpayers who choose certain IRS tax settlement options may be able to repay their tax debt at a fraction of the full amount of tax debt owed.

The federal government has given the Internal Revenue Service (IRS) the ability to collect federal taxes which are then used to fund the activities of the federal government. With this authority, the IRS can decide how much money they are willing to accept to repay outstanding tax debt and can use wage garnishments, property repossession and bank account levies to compel taxpayers to pay tax debt. All West Virginia taxpayers who need more information about IRS tax settlement options can contact a tax professional for help.

Offer in Compromise

Offer in Compromise (OIC) is a popular method used by West Virginia taxpayers to settle IRS tax debt. With an OIC, a West Virginia taxpayer can make an offer to the IRS, and if the IRS accepts the offer the debt outlined in the OIC agreement will be considered settled. An OIC may allow a taxpayer to pay less than the full amount of tax debt owed.

The IRS denies most OIC offers and if denied, the taxpayer may be able to negotiate or appeal the decision.  The IRS will have sole authority to deny or accept all OIC offers. West Virginia taxpayers do not have the ability to sue the IRS or take them to court to compel them to accept OIC offers.

Offer in Compromise stops penalties and interest from accruing and stops all IRS collection efforts, but OIC can be difficult to implement and time consuming. In the OIC application process the IRS will request detailed financial information, and if the OIC is denied the IRS may use this information to continue their collection efforts. Offer in Compromise can be an effective IRS tax settlement option, but it may not be the best one for all West Virginia taxpayers.

Qualifying for Offer in Compromise

Everyone who requests an Offer in Compromise will not qualify for one. West Virginia taxpayers must meet one of the following conditions:

  • Doubt as to Liability- Errors do not frequently occur, but could if the IRS made a miscalculation or misapplied tax laws. If the IRS decides the amount of tax debt assessed against the West Virginia taxpayer may be incorrect, they may be willing to accept an Offer in Compromise.
  • Doubt as to Collectibility- This condition differs from the first. The amount of tax liability is not in question, only the ability of the IRS to collect the tax debt. Under this condition the IRS also may be willing to accept an OIC if they believe the cost to collect the tax debt is too high.
  • Effective Tax Administration- West Virginia taxpayers who may suffer a hardship which could be inequitable or unfair if they pay their federal tax debt may qualify for an Offer in Compromise. The elderly and the handicapped are most likely to qualify under this condition.

West Virginia taxpayers also must complete the following tasks:

  • Complete federal tax returns and make their federal tax payments before the tax deadline for the next five years.
  • Complete the Offer in Compromise requirements.

Installment Agreement

Another common IRS tax settlement option for West Virginia taxpayers to repay tax debt is called an installment agreement. Installment agreements require all federal tax debt to be repaid, but they allow West Virginia taxpayers to spread out tax payments over a specified time period and pay the tax in monthly installments. The time allowed for repayment varies based on the amount of tax owed.

Taxpayers who owe $25,000 or less can usually qualify for an installment agreement. West Virginia taxpayers who more than $25,000 should contact a tax professional (certified public accountant, enrolled agent or tax attorney) to negotiate a repayment plan.

Penalties and interest will continue to accrue throughout the repayment period, but the IRS will stop their collection actions. It will always be more expensive to use an installment agreement than to pay all IRS tax debt in a one time lump sum payment.

The Internal Revenue Service can cancel an installment agreement for a variety of reasons including:

  • If the West Virginia taxpayer fails to pay the full monthly installment payment each month. First time violators may be granted a 30-60 day grace period.
  • If the West Virginia taxpayer does not submit their federal tax return every year.
  • If the West Virginia taxpayer’s financial situation improves significantly.
  • If the West Virginia taxpayer provides incorrect financial information to the IRS for the installment agreement.
  • If the West Virginia taxpayer is self-employed and does not file their federal tax returns each quarter or make estimated quarterly tax payments.
  • If the West Virginia taxpayer does not pay their tax payments for the five years before the IRS tax debt which can not be paid.
  • If the West Virginia taxpayer has had another installment agreement within the last 5 years.

Partial Payment Installment Agreement

West Virginia taxpayers who do not qualify or want to use an Offer in Compromise or who can not repay their federal tax debt with an installment agreement may be able to use a partial payment installment agreement (PPIA). The PPIA allows the taxpayer to pay only part of their tax debt in monthly installment payments. The IRS will determine what amount of debt will not be part of the PPIA and this debt will be forgiven.

Penalties and interest will continue to accrue during the installment period, but the IRS will stop all attempts to collect outstanding IRS tax debt. The IRS will review the PPIA every two years to determine if the West Virginia taxpayer’s financial condition has substantially improved. If it has, the IRS has the authority to cancel the PPIA or to increase the PPIA payments.

Currently Not Collectible

West Virginia taxpayers who can not pay their federal tax debt with an IRS tax settlement option may have their tax status changed to “currently not collectible”. Under this tax status, the IRS will cease all collection actions, but penalties and interest will continue to accrue.

The IRS will send a notice to the West Virginia taxpayer every year detailing the amount of tax debt owed. This notice is not considered a tax bill. If the IRS has not attempted or succeeded in collecting the tax debt within 10 years (the statutory time limit) the tax debt will be forgiven.

Penalty Abatement

West Virginia taxpayers who make tax errors such as failing to pay federal taxes, failing to file a tax return, requesting a false refund or misrepresenting their tax information may have penalties assessed against them. If the West Virginia taxpayer has a valid reason for the tax infraction the IRS may be willing to lower or abate the penalty.  Valid reasons could include: personal duress, poor mental or physical health or bad professional advice. West Virginia taxpayers who have had penalties assessed against them can contact a tax professional for help. The IRS may not be willing to lower or abate all penalties.

Wisconsin IRS Tax Settlement Options

Wisconsin taxpayers who have outstanding federal tax debt may be able to use an IRS tax settlement option to repay their tax debt. Under certain conditions, taxpayers may even be able to pay less than the full amount of IRS tax debt owed. The Internal Revenue Service (IRS) has the authority to collect federal tax debt and if necessary use wage garnishments, tax levies and property repossession to compel Wisconsin taxpayers to pay their tax debt.

Wisconsin taxpayers who are currently being harassed by the IRS may be able to get help. Taxpayers can contact a tax professional such as an enrolled agent, certified public accountant or tax attorney to review their tax repayment options. The IRS may be willing to allow the taxpayer to pay less than they owe if they are convinced the taxpayer can not make a lump sum payment or repay all of their tax debt with an installment agreement.

Offer in Compromise

Offer in Compromise allows the Wisconsin taxpayer to make an offer to the IRS, and if the IRS accepts the taxpayer’s offer the tax debt outlined in the OIC agreement will be settled. Offer in Compromise can stop all penalties and interest from accruing and stop the IRS tax collection efforts. Offer in Compromise frequently allows the Wisconsin taxpayer to pay less than the full amount of IRS tax debt owed.

Not all Offer in Compromise offers will be accepted. Currently the IRS accepts approximately 20-25% of first time OIC offers. Negotiations may be allowed to help the IRS and the Wisconsin taxpayer find an agreeable settlement amount. Offer in Compromise is not a simple process. It can be expensive, time consuming and difficult to implement. Large amounts of detailed financial data may be needed by the IRS to process the OIC application, and if the OIC is denied, the IRS may decide to use this information to restart their debt collection efforts. Offer in Compromise is one of several IRS tax settlement options available to Wisconsin taxpayers and it may not be the best option for all taxpayers.

Qualifying for Offer in Compromise

The IRS has criteria which must be met for them to accept an Offer in Compromise. Wisconsin taxpayers must meet one of the following:

  • Doubt as to Liability- If the IRS determines the amount of tax liability they have charged the Wisconsin taxpayer may be incorrect they may accept an Offer in Compromise. Errors can occur if there is a misinterpretation of tax law, data which has not been considered is offered by the taxpayer or a miscalculation. This condition is seldom met.
  • Doubt as to Collectibility- If the IRS determines they may be unable to collect IRS tax debt before the statute of limitations expires they may accept an OIC. The IRS may also accept an Offer in Compromise under this condition if they believe the cost to collect the tax debt is too high.
  • Effective Tax Administration- If the IRS determines a Wisconsin taxpayer may suffer a hardship which is inequitable or unfair if they pay their IRS tax debt the IRS may accept an Offer in Compromise. The elderly and the handicapped most often qualify under this condition.

The following requirements must also be completed by the Wisconsin taxpayer:

  • All future IRS debt must be paid on or before the federal tax deadline for the next five years.
  • All Offer in Compromise requirements must be completed by the Wisconsin taxpayer.
  • Wisconsin taxpayers must send their IRS tax returns to the IRS by the federal tax deadline.

Installment Agreement

Installment agreements are the most common type of IRS tax settlement option used by taxpayers to repay tax debt. The installment agreement requires all of the IRS tax debt to be repaid (no compromised payment options), but it allows repayment in manageable monthly installment payments. The amount of time allowed to repay tax debt varies based on the total amount of IRS tax owed.

Wisconsin taxpayers who owe $25,000 or less can more easily qualify for an installment agreement than those owing more than $25,000. Any taxpayer who owes more than $25,000 in IRS tax debt should contact a tax professional who can help negotiate an installment agreement with the IRS.

Penalties and interest will continue to accrue during the installment agreement, but the IRS will stop all collection actions. Taxpayers who are trying to save money will always pay less by making tax payments with a one time lump sum payment. The IRS can terminate an installment agreement (IA) for any of the following reasons:

  • The Wisconsin taxpayer fails to make their monthly tax payments.
  • The Wisconsin taxpayer does not file their federal tax returns.
  • The Wisconsin taxpayer pays less than the required installment agreement monthly payment amount.  The IRS may give first time violators a grace period of 30-60 days.
  • The Wisconsin taxpayer’s financial condition substantially improves.
  • The Wisconsin taxpayer provides false tax information to the IRS during the installment agreement application process.

All the following requirements must also be met for an installment agreement:

  • All self-employed Wisconsin taxpayers must file quarterly tax returns and pay estimated quarterly tax payments.
  • Wisconsin taxpayers must file all federal tax returns.
  • Wisconsin taxpayers must pay their IRS tax debt for the 5 years before the tax liability which can not be paid.
  • Wisconsin taxpayers can not have had another installment agreement with the Internal Revenue Service within the last 5 years.
  • The IRS will review the Wisconsin taxpayer’s financial situation every 2 years.

Partial Payment Installment Agreement

Wisconsin taxpayers who do not qualify for an Offer in Compromise or can not make all of their tax payments with an installment agreement may be able to use a partial payment installment agreement or PPIA to settle their IRS tax debt. PPIA allows the Wisconsin taxpayer to repay their IRS tax debt with partial monthly installment payments. If the IRS agrees to the conditions of the PPIA, whatever debt is not considered part of the PPIA will be forgiven.

PPIA can be less time consuming, less complicated and less expensive to implement than an Offer in Compromise, but penalties and interest will continue to accumulate. Debt collection efforts will stop. The IRS will review the PPIA plan every two years and if the Wisconsin taxpayer’s financial condition has improved, the IRS has the authority to increase PPIA payments or terminate the PPIA. A partial payment installment agreement will always cost the taxpayer more money than repaying the tax debt with a lump sum payment.

Currently Not Collectible

Wisconsin taxpayers who have debt which can not be paid may have their IRS tax debt declared “currently not collectible”. Under this condition the IRS will stop all collection actions, but penalties and interest will continue to accrue on all outstanding tax debt.

The IRS will send the Wisconsin taxpayer a letter each year listing the tax balance, but this notice is not considered a tax bill. The IRS has ten years to collect the debt or the statute of limitations will expire and the debt will be forgiven.

Penalty Abatement

Wisconsin taxpayers that fail to pay their federal taxes, do not file a tax return, request a false refund or falsify tax information on their tax return may face penalties. There may be a valid reason for some tax mistakes. If the taxpayer can provide a valid reason the penalty may be lowered or abated. Not all reasons will be considered valid. Valid reasons may include: personal duress, being the victim of a natural disaster, poor mental or physical health or poor tax professional advice. The IRS may not be willing to lower or abate all penalties. Wisconsin taxpayers with penalties should contact a tax professional for help.

North Carolina IRS Tax Settlement Options

North Carolina taxpayers who have excessive IRS back taxes which they are unable to pay may find relief with one of the IRS tax settlement options offered by the Internal Revenue Service. The IRS has been given the ability by the federal government to collect federal taxes. If North Carolina taxpayers fail to pay their tax debt they may become the target of aggressive tax collection efforts by the IRS. The IRS is authorized to use a variety of techniques to collect taxes including: wage garnishment, property repossession or bank account levies.

Any North Carolina taxpayer who is interested in avoiding the IRS tax collectors or settling their IRS tax debt can contact a tax professional to discuss their tax payment options. The IRS may be willing to settle back tax debt for a fraction of the full amount owed if it means the taxpayer may be able to pay their future federal taxes.

Offer in Compromise

Many North Carolina taxpayers have had success settling IRS tax debt with Offer in Compromise. Offer in Compromise allows the taxpayer to suggest a tax amount to settle their tax debt and if the IRS accepts the settlement offer the tax outlined in the OIC will be settled.

If the Offer in Compromise is accepted, penalties and interest will stop accruing and the IRS will cease all collection actions. Offer in Compromise can be difficult to implement and time consuming. North Carolina taxpayers also will have to provide detailed information to the IRS which the IRS can use against them to continue tax collection if the OIC is denied.

The Internal Revenue Service denies approximately 80% of first time Offer in Compromise offers but may be willing to negotiate with the taxpayer to find a settlement amount which is agreeable to the federal government and to the North Carolina taxpayer. All North Carolina taxpayers who are considering Offer in Compromise may want to contact a tax professional. OIC is one of several IRS tax settlement options available and it may not be the best option for all North Carolina taxpayers.

Qualifying for Offer in Compromise

Certain conditions must be met by the North Carolina taxpayer to qualify for Offer in Compromise. The IRS will only grant an OIC if taxpayers meet one of the following:

  • Doubt as to Liability- The IRS will accept an Offer in Compromise if the amount of tax debt assessed against the taxpayer could be incorrect. Errors can occur if the IRS miscalculates the tax debt or if some of the taxpayer’s financial information was not considered. This condition is not frequently met.
  • Doubt as to Collectibility- The IRS will accept an Offer in Compromise if they doubt they can collect the debt either now or in the future. An OIC may also be accepted if the cost to collect the debt is considered too high.
  • Effective Tax Administration- Payment of IRS tax debt may cause some North Carolina taxpayers a hardship which is “inequitable or unfair”. The IRS may accept an OIC if this condition is met. This condition is most frequently used for the handicapped and elderly.

The following Offer in Compromise requirements must also be met:

  • Taxpayers must pay all IRS tax debt before the federal deadline for the next five years.
  • Taxpayers must meet all of the OIC requirements and pay the Offer in Compromise payments.
  • All requested Offer in Compromise information and additional federal tax forms must be sent to the IRS.

Installment Agreement

Installment agreements (IA) are the most common method used by taxpayers to pay their outstanding IRS tax debt. The installment agreement can be less complicated and less difficult to implement than an OIC, but the taxpayer will have to pay all of the outstanding debt in monthly installment payments. The amount of money owed will determine how quickly the payments must be completed.

Most taxpayers can qualify for an installment agreement if they owe $25,000 or less in outstanding IRS tax debt. North Carolina taxpayers who owe more than $25,000 should contact a tax professional (enrolled agent, tax attorney or certified public accountant) for help negotiating the IA.

The installment agreement will not stop penalties and interest from accruing on the outstanding tax debt, but it will stop all IRS collections. The installment agreement will not be the cheapest method to pay tax debt. To avoid penalties and interest tax debt should be paid as soon as possible and in one lump sum payment.

If the North Carolina taxpayer does not follow all of the requirements of the installment agreement the IRS has the authority to terminate the IA. Violations of the installment agreement could include:

  • Not paying or paying less than the agreed upon installment payment. The IRS may grant first time violators a 30-60 day grace period.
  • Not filing a federal tax return every year.
  • If the North Carolina taxpayer’s financial position dramatically improves.
  • Falsifying information on the installment agreement application.
  • If self-employed North Carolina taxpayers do not file federal tax returns each quarter or pay estimated tax payments each quarter.
  • Failing to pay all tax payments for the five years before the federal tax debt which can not be paid.
  • If the North Caroline taxpayer had another installment agreement within the last five years.

Partial Payment Installment Agreement

North Carolina taxpayers who can not pay the full amount of tax payments with an installment agreement and who do not qualify for an OIC may be able to use the partial payment installment agreement (PPIA) to settle their tax debt. Unlike the installment agreement, the PPIA will allow the taxpayer to make partial monthly installment payments over a specified period of time. The debt which is not included in the PPIA will be forgiven by the IRS.

Penalties and interest will continue to accrue during the PPIA, but the IRS will cease all collections. The Internal Revenue Service will review the PPIA every 2 years and if the North Carolina taxpayer’s financial situation has dramatically improved, the PPIA can be modified to require larger tax payments or completely cancelled.

Currently Not Collectible

North Carolina taxpayers who can not pay their IRS tax debt may have their tax status changed to currently not collectible. Penalties and interest will continue to collect on the outstanding tax debt, but the IRS will cease collections.

Every year the Internal Revenue Service will send a written notice to the taxpayer outlining the status of the tax debt. This notice is not a bill. The IRS will have ten years to collect the outstanding IRS tax debt before the statute of limitations expires.

Penalty Abatement

The IRS can charge North Carolina taxpayers penalties for certain tax violations including: failure to file a federal tax return, misstating financial information (either accidently or on purpose) or requesting a false refund. If there is a valid reason, the IRS may be willing to lower or abate tax penalties. Valid reasons may include: incorrect tax professional advice, poor mental or physical health, personal duress, or if the taxpayer is a victim of a natural disaster.

South Carolina IRS Tax Settlement Options

The Internal Revenue Service or IRS has created IRS tax settlement options to help taxpayers pay their excessive federal tax debt. Several of the tax settlement options may allow South Carolina taxpayers to settle their IRS tax debt for a fraction of the full amount owed.

South Carolina taxpayers who are facing wage garnishments, repossessions or bank account levies may have options to stop these aggressive IRS collection tactics. South Carolina taxpayers can contact a tax professional such as an enrolled agent, tax attorney or certified public accountant for help. Tax professionals can answer their questions about available tax settlement options and which option might be best to settle IRS tax debt.

Offer in Compromise

South Carolina taxpayers have a variety of IRS tax settlement options, but Offer in Compromise or OIC is one of the most popular. OIC allows the South Carolina taxpayer to send an OIC offer to the IRS and if the IRS accepts the offer, the tax debt outlined in the Offer in Compromise will be settled (after the taxpayer meets all of the OIC requirements). Penalties and interest will stop accruing and all collection actions against the South Carolina taxpayer will cease if the Offer in Compromise is accepted.

The IRS will reject most Offer in Compromise offers, in fact 80% of first time offers will be rejected. The IRS may however, be willing to negotiation with the taxpayer if they do not think the taxpayer can pay the tax debt in one lump sum payment or with an installment agreement. If the IRS refuses to negotiate, the taxpayer may be able to file a formal appeal.

The OIC may allow the South Carolina taxpayer to settle their IRS tax debt for a fraction of the total cost, but the downside is the IRS will request detailed information for the Offer in Compromise and if the OIC is denied this information may be used to continue collection efforts against the taxpayer. The OIC can also be costly and time consuming. While Offer in Compromise is a popular tax settlement option, it may not be the right one for all South Carolina taxpayers.

Qualifying for Offer in Compromise

An Offer in Compromise will only be accepted if the South Carolina taxpayer’s debt meets one of the following conditions:

  • Doubt as to Liability- The amount of assessed tax debt may be incorrect. Errors are infrequent, but they can occur through miscalculations, misinterpretation of tax laws or if the taxpayer has tax information which has not been analyzed. This condition is not frequently used.
  • Doubt as to Collectibility- The IRS may accept an OIC if they believe they will not be able to collect the IRS tax debt before the deadline expires. The IRS also may accept an OIC under this condition if they have decided the cost of collecting the outstanding debt is too high.
  • Effective Tax Administration- If the South Carolina taxpayer may experience an inequitable or unfair hardship as a result of paying their outstanding tax debt the IRS may accept an Offer in Compromise. The elderly and the handicapped most frequently use this condition.

South Carolina taxpayers must also meet the following Offer in Compromise requirements:

  • They must pay their IRS debt before the federal deadline for the next five years.
  • All of the OIC requirements must be met and all payments made.
  • All federal tax forms and Offer in Compromise documents must be sent to the IRS.

Installment Agreement

Installment agreements are the most popular method used to pay outstanding tax debt. Installment agreements or IA allows the taxpayer to repay their tax debt in monthly installment payments. This payment method can be less costly and less difficult to use than Offer in Compromise. The amount of time allowed to repay the IRS debt can vary depending on the amount of federal taxes owed by the South Carolina taxpayer.

If the South Carolina taxpayer owes $25,000 or less in outstanding tax debt, the IRS generally will accept an installment agreement. Taxpayers who owe more than $25,000 in outstanding IRS tax debt should contact a tax professional who can help negotiate the installment agreement with the most favorable repayment terms.

The installment agreement will not stop penalties and interest from accruing, but it will stop the IRS from continuing to try to collect outstanding tax debt. Installment agreements will always cost the taxpayer more money than paying the IRS tax debt in one lump sum. The installment agreement may be cancelled by the IRS for many reasons:

  • Not paying the full installment payment or missing payments. First time violators may be granted a 30-60 day grace period.
  • Not filing a federal tax return each year.
  • If the South Carolina taxpayer’s finances dramatically improves.
  • Providing inaccurate financial information on the installment agreement application.
  • If self-employed South Carolina taxpayers do not file their federal tax returns or pay their estimated tax payments each quarter.
  • If the taxpayer does not make their IRS tax payments for the 5 years before the tax debt which can not be paid.
  • If the South Carolina taxpayer had another installment agreement in the previous five years.

Partial Payment Installment Agreement

South Carolina taxpayers who can not afford to pay the full amount of the IRS tax debt with an installment agreement may qualify for a partial payment installment agreement or PPIA. PPIA is similar to the installment agreement and will let the taxpayer pay monthly payments, but the payment amount will only be for part of the tax debt owed. The remainder of the tax debt not outlined in the PPIA will be considered settled.

The PPIA will not stop interest and penalties from continuing to accrue on the outstanding tax debt, but will stop all IRS collection efforts. The IRS will review the South Carolina taxpayer’s finances every two years and if their finances have substantially improved, the IRS has the authority to increase the PPIA payment amount or cancel the PPIA.

Currently Not Collectible

South Carolina taxpayers who can not pay their IRS tax debt may have their tax status changed to currently not collectible. Interest and penalties will continue to collect on the outstanding tax debt but the Internal Revenue Service will cease all collection efforts.

The IRS will send a written notice to the South Carolina taxpayer each year. The notice will document the total amount of outstanding debt, but is for information purposes only and is not considered a tax bill. The IRS will have 10 years to collect the IRS tax debt before the statute of limitations expires.

Penalty Abatement

The IRS can assess penalties for a variety of tax infractions including: not filing a tax return, providing false information, requesting a false refund or not paying federal taxes. South Carolina taxpayers who have penalties may, with a valid reason, be able to convince the IRS to lower or abate their penalties. Valid reasons might include: ill health, incorrect tax advice from a tax professional, involvement in a natural disaster or personal duress. The Internal Revenue Service has the authority to determine what penalties will be abated.

Missouri IRS Tax Settlement Options

The Internal Revenue Service (IRS) has been tasked with collecting federal taxes. The Federal government has also given the IRS not only the ability to use aggressive collection actions to ensure all federal tax debt is paid but also the authority to create a variety of IRS tax settlement options to facilitate tax payment. Taxpayers frequently can use one of these IRS tax settlement options to pay their debt for a fraction of the full amount owed. The IRS hopes by providing a method to settle back taxes taxpayers will be more likely to make all of their future tax payments.

All Missouri taxpayers who have outstanding IRS tax debt can contact a tax professional (enrolled tax agent, tax attorney or a certified public accountant) who can review all of the IRS tax settlement options available.

Offer in Compromise

Offer in Compromise is one of the main tax settlement options people might consider when they want to settle their tax debt and under certain conditions it may be the best. Offer in Compromise will allow the Missouri taxpayer to propose a settlement payment amount and if the IRS accepts the offer the amount outlined in the OIC will settle their outstanding tax debt.

Penalties and interest will continue to accrue while the OIC is under consideration by the Internal Revenue Service. If the IRS accepts the OIC they will cease all collection actions against the Missouri taxpayer. The OIC process can be time consuming, expensive and difficult. The Internal Revenue Service will need detailed financial information to process the OIC and if it is denied they can use the information they have gathered to restart debt collection.

The IRS will not accept all Offer in Compromise offers. Currently about 20% of first time offers are accepted prior to negotiations or appeals. Offer in Compromise is only one of several IRS tax settlement options available to Missouri taxpayers and it may not be the best option.

Qualifying for Offer in Compromise

The IRS will not accept all OIC offers. To qualify for an OIC, the Missouri taxpayer must meet one of the following conditions:

  • Doubt as to Liability- If the IRS believes the amount assessed against the taxpayer could be incorrect they may accept an OIC. Inaccurate tax assessments could be the result of a miscalculation or failure to consider all tax information. The IRS does not generally use this condition to accept an OIC.
  • Doubt as to Collectibility- Under this condition the amount of tax debt is not in question only the ability of the IRS to collect the tax debt either now or in the future. In some cases the IRS may also accept an OIC under this condition if the cost to collect the IRS debt is too high.
  • Effective Tax Administration- If payment of the IRS tax debt may cause a hardship which is “inequitable or unfair” for the Missouri taxpayer the IRS may accept an OIC. This condition is most frequently used for the handicapped and elderly.

The following OIC requirements must also be met:

  • The Missouri taxpayer must pay all IRS tax debt before the federal deadline for the next 5 years.
  • The Missouri taxpayer must make the required Offer in Compromise payments.
  • The Missouri taxpayer must send all requested OIC information and all of their federal tax forms to the IRS by the federal tax deadline.

Installment Agreement

Taxpayers who do not qualify for an OIC can also use another popular tax settlement option called the installment agreement. Installment agreements or IA can be used by the Missouri taxpayer to pay all of their outstanding tax payments in monthly installments. Using the installment agreement, the Missouri taxpayer will make tax payments for a specific period of time. The time may vary based on the total amount of IRS tax owed. Missouri taxpayers who owe $25,000 or less can generally qualify for an installment agreement, but taxpayers who owe $25,000 or more will want to contact a tax professional for help.

The installment agreement will stop all IRS collection efforts against the Missouri taxpayer, but unfortunately, penalties and interest will continue to accumulate. It is always less expensive to pay all IRS tax debt with a one time payment to avoid penalties and interest payments. The IRS has the authority to terminate an installment agreement if Missouri taxpayers do not follow all the IA requirements. Violations of the requirements may include:

  • Failing to pay the full amount of the installment agreement. The IRS may grant first time violators a 30-60 day grace period.
  • Failing to file a federal tax return each year.
  • The Missouri taxpayer’s financial situation dramatically improves.
  • Falsifying financial information to obtain the installment agreement.
  • Failure of the self-employed Missouri taxpayer to submit their federal tax returns each quarter or pay their quarterly federal tax payments.
  • Failing to make all federal tax payments for the 5 years before the federal tax debt which can not be paid.
  • Having another installment agreement within the last 5 years.

Partial Payment Installment Agreement

Missouri taxpayers who do want to use an Offer in Compromise or who can not make the full tax payments with an installment agreement may be able to settle their tax debt with a partial payment installment agreement or PPIA. The PPIA may allow the taxpayer to pay part of their IRS tax debt within a specified time period using monthly installment payments. Unlike the installment agreement, partial not full payments are made and the tax debt not paid will be considered settled or forgiven by the Internal Revenue Service.

The PPIA will not stop penalties and interest from accruing but it will stop all IRS collection efforts. The IRS will review the partial payment installment agreement every two years to make sure the Missouri taxpayer’s financial situation has not improved so significantly that the PPIA could be updated or cancelled.

Currently Not Collectible

If a Missouri taxpayer absolutely can not pay tax debt the IRS may change the status of the debt to currently not collectible. The accumulation of penalties and interest will continue until the tax debt is paid or the debt is forgiven. The IRS will send written notification to the taxpayer outlining the amount of tax debt still owed. This notice is not a tax bill. If the IRS does not collect the IRS debt within 10 years the statute of limitations will expire and the tax debt will be forgiven.

Penalty Abatement

Missouri taxpayers may be assessed IRS penalties if they fail to file a tax return, report inaccurate tax information on their tax return or request a false refund. The IRS may be willing to abate the penalties if the Missouri taxpayer can prove there was a valid reason the error occurred. Penalty abatement may be allowed if the taxpayer can prove: failing mental or physical health, poor tax professional advice or personal duress. The IRS may not be willing to abate all penalties. Missouri taxpayers who have questions about penalty abatement should contact a tax professional.

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