By: Kaneisha Mitchell
Do you owe the IRS money? Whenever you log into your IRS account do you get stressed or overwhelmed because your tax bill is so high? You may want to know that there are legit ways to settle your IRS tax debt for less money than you owe.
Since the Covid-19 pandemic the IRS has settled with more Americans than the norm. The IRS understands that people are unable to pay what they owe or may even not want to pay what is owed. You can represent yourself or hire a company to settle on your behalf.
3 Ways to Settle Tax Debt and Pay Less
1. Offer in Compromise
The Offer in Compromise (OIC) is an IRS program that helps you reduce your tax debt. This program allows you to make a lower lump sum payment on your IRS tax debt. The payment amount is lower than the actual IRS tax debt that is owed.
OIC is a settlement that takes care of your entire debt with the stipulation that the IRS gets the agreed upon amount all at once.
To qualify for the Offer in Compromise program you need to meet specific qualifications.
2. Partial Payment Installment Agreement
The Partial Payment Installment Agreement (PPIA) lets you pay your IRS tax debt for a specified amount of time in low monthly installments. PPIA is one of the newer programs offered by the IRS.
After, you have paid your installments as agreed, your debt is forgiven, even if you have not paid the entire balance owed. PPIA is geared toward people who owe at least $10,000 to the IRS (and that includes interest and penalties).
As with the OIC, to qualify for the PPIA program, you need to meet specific conditions.
3. Innocent Spouse Tax Relief
Did you know that you may be able to get off the hook for a tax bill if you can be deemed an innocent spouse? If you and your significant other file joint tax returns and end up with a huge tax bill, you may be eligible for this program.
If your spouse failed to report income, reported income improperly, or claimed improper deductions or credits the IRS offers you tax burden relief under this program.
To figure out the best tax solution, do not go at it alone and instead contact a professional and they will assist you in finding a tax debt strategy that is right for you.
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