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It is often feasible to wipe your tax slate clean at a big discount. If you qualify for something known as the offer in compromise, called an "offer" or "OIC," the IRS has been known to accept as little as 1% of the total owed on a tax bill and call it even.
There is no legal right to have a convincing tax demand reduced by the IRS -- it is wholly a matter of govt discretion. Unfortunately, fewer than half the OICs submitted are accepted by the IRS, although you do have a right to take a confounded OIC to the IRS Appeals Office. The simplest way to reply to this query is to hire a professional.
The first reason to hire a seasoned pro is to take the poser out of the process. Secondly, in most situations, hiring a professional will essentially save you money.
To do either of these, the IRS will use a group of formulas to determine how much you can pay every month. If you are not familiar with these formulas, you could end up showing a capability to pay bigger than what you actually have. Do not expect the IRS to identify your mistake!
If you've got the capability to pay $100 per month and you complete the forms wrongly, or depend on IRS "advise", you could end up paying hundreds every month more than that. A normal engagement to agree an installment agreement costs from $350 to $700. Otherwise, you could end up paying the extra $200 per month for years and years. If you are making a $200 error on an Offer in Compromise -- it could cost from $9,600 to $12,000 relying on how the Offer is to be bankrolled. A typical Offer engagement costs less than one tenth of that. Is it actually worthwhile to save a hundred greenbacks up front?
FAQ: what are my rights when owing back taxes
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