Alternatives to Collections

Offer in Compromise

You Owe the IRS Back Taxes, Interest and Penalties and Can’t Possibly Pay It?

You may have considered making an offer to the IRS to settle your back tax bill for a single payment you could afford. Most people have heard that it’s possible to pay an amount is much lower than their total IRS debt, but the most important detail usually not covered until it’s too late is that it’s necessary to make a well-supported case that:

  • You don’t really owe the tax in the first place; or,
  • There is little chance that you could pay the total tax bill; or,
  • If the IRS DID collect the total tax bill from you, it would be an economic hardship for you, or
  • It would be unfair under your particular life circumstances.

The IRS Offer in Compromise program exists because there are valid circumstances where it is in the interest of the US Government and the taxpayer to compromise. However, the IRS is very careful about accepting these types of offers and they require reasonable and documented proof. Attempting to make an Offer in Compromise on your own requires confidence that you can understand the economic parameters the IRS uses to measure how good your case will be, and that you can develop and present the evidence that will prove your case. If you don’t have this confidence, it will be better to let BestTaxPro step into your shoes – because if you actually qualify and you don’t do this right, you could end up being in the 75% of offers that the IRS rejects — and you will certainly end up paying more than you needed to.

If you DO want to explore engaging BestTaxPro to help you with an Offer in Compromise, we will explain the process and what you can expect before you start. Our goal is to help tax payers find the best deal, the most affordable tax debt settlement solution, and the easiest way to once and for all end your IRS tax problems.

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Installment Payment Plans

IRS Payment Plans Are Useful Tools for IRS Payment Arrangements

Setting up an IRS Installment Agreement is one of the most frequently used strategies to resolve back taxes. Negotiating an IRS payment plan increases in difficulty as the amount of the tax debt increases.

The IRS would prefer to collect as much money as possible, as soon as possible. The most common mistake taxpayers make when trying to negotiate an IRS payment arrangement themselves is adopting the IRS’ view on how much they should be able to afford to pay each month. The IRS uses guidelines on what your living expense OUGHT to be that may bear no relationship to the reality of an actual person’s actual living expenses – and here all we are talking about is simply real world living expenses.

You’re better off bringing BestTaxPro into the picture to negotiate your IRS installment agreement, particularly at higher amounts of tax debt, because our experts have the years of skill in specifically negotiating IRS installment agreements. BestTaxPro has the experience to evaluate your economic situation and, with frequently and recently updated knowledge of how far the IRS will go to make a reasonable deal, can work out an arrangement that works for both parties.

BestTaxPro starts with an evaluation of your transcript of tax account to see what the IRS sees and to work out a tax resolution strategy that will solve your tax problem – what you know about and even what you don’t yet know about. Then the experts at BestTaxPro evaluate your personal economic circumstances to determine what you could afford to pay and how and when you could afford to pay it. Then, with knowledge of the tax law and regulations at least equal to the best IRS agents, BestTaxPro negotiates a settlement that fits within the IRS guidelines and legal requirements that both sides can live with – solving your tax problem permanently for the lowest amount allowed by law.

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Currently Not Collectible

No Money to Pay Taxes or to Keep Paying Back Taxes —
You Can Stop IRS Collection of Tax Debt if You Qualify as CNC

If your economic circumstances have deteriorated and you have too little money left after you pay for the essentials of living: rent, utilities, groceries, etc., you may be in the best situation to qualify as Currently Not Collectible (CNC). That means that the IRS would stop trying to collect back tax debt from you, whether or not you have a payment agreement with them. Getting CNC status will cease collection activity and give you some breathing room, but it only defers payment, it won’t make your tax debt go away, and it will not stop interest and penalties from growing on the unpaid tax debt. You should consult with BestTaxPro to determine whether applying to the IRS for CNC status will help you or hurt you taking into consideration your personal financial situation.

To qualify as Currently Not Collectible, the IRS will use a formula to assure that the reason that there is too little money left after you pay for living essentials, is that YOU mean the same thing by “living essentials” as the IRS does. If a taxpayer’s expenses are inflated, the argument won’t fly. The IRS uses published standards for how much a taxpayer is allowed to pay for rent, utilities, groceries, commuting, etc. that are adjusted for factors like family size, marital status and region of residence. Nothing is simple under the tax law and it would be prudent to get a sense from a qualified tax professional whether you qualify as Currently Not Collectible before you try to make this assertion to the IRS. Figuring out whether you qualify for CNC, and often more importantly for those whose economic circumstances are changeable, figuring out whether you are better off economically to seek CNC status, is something that BestTaxPro can help you with.

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Penalty Abatement

IRS Penalties – Penalty Abatement

IRS penalties and interest make owing back taxes much worse the longer they go unpaid. They make the total debt grow very rapidly, in some cases up to almost 50% more than the original tax owed. If you work with BestTaxPro to resolve your tax debt, our firm challenges each and every part of the alleged tax debt: principal, interest and penalties. After assuring that the tax the IRS originally assessed is at the lowest amount allowed by law, BestTaxPro goes to work to see if the penalties can be reduced or completely forgiven.

The added IRS penalty on back tax debt adds a significant additional burden to pay. BestTaxPro analyzes your life circumstances to determine whether you fit within any of the categories under which the IRS must, or has the discretion to, forgive your IRS penalties. The types of circumstances that can qualify are the occurrence of a natural disaster, a serious health problem for the taxpayer or the need to care for a family member, the death of a family member, bad financial advice from a professional on whom it would be reasonable to rely upon or lost or destroyed financial records. A “just because” argument will not work. BestTaxPro has the professional skill and experience to evaluate and describe any qualifying circumstances in a way that will fit the IRS justifications for penalty abatement so your IRS penalties can be eliminated or reduced.

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Innocent Spouse Relief

You Both Signed the Tax Return but You Don’t Know WHAT He/She Did.

If the IRS is coming after you for tax debt that started when you filed a joint return with a spouse, and you don’t know WHAT your spouse (or then-spouse) did, BestTaxPro encourages you to call us to help you find out if you qualify for innocent spouse relief. What matters most is whether you had knowledge of your spouse not reporting income, or taking improper deductions – or if you even knew about the income that was not reported, or whether you knew where the unreported income came from. Putting together a strong case will hinge on gathering the right facts, structuring them into a valid case, and presenting the evidence in a way that will give reasonable reliability to your assertions, something better done with the help of the competent tax professionals at BestTaxPro.

When you sign a tax return to file a jointly with a spouse, the IRS holds BOTH of you responsible to pay the ENTIRE tax – but if you BOTH don’t pay the tax debt – then the IRS will come after EACH of you INDIVIDUALLY for the WHOLE tax debt. It doesn’t matter if somehow you’re now divorced and it doesn’t matter whether in the context of a divorce proceeding (or in some other way) a state court says that you are not responsible for the tax debt. The IRS has federal jurisdiction and ignores state proceedings when assessing or collecting federal income tax. If your spouse did something improper with the tax filing that led to the tax debt the IRS is now trying to collect from you, what you need specifically is IRS Innocent Spouse Relief.

The professionals at BestTaxPro are experts in interpreting the specific facts and circumstances of your situation to see if you have a shot at qualifying for Innocent Spouse Relief. If you do, they know how to assemble the necessary facts and circumstances as evidence to structure a compelling case to present to the IRS on your behalf. All you need to do is talk to BestTaxPro. We talk to the IRS, so that you don’t have to.

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