There are many cases where taxpayers fail to pay off the entire amount of taxes that they owe which results in penalties for late payment. The penalties add up to the original amount and resulting in heaps of tax debt for the taxpayer to pay. Often times, the taxpayer is not able to pay such large amount in taxes which creates further complications.
Even in such a critical situation, there is a chance for the taxpayer to come out of the tax debt.
The IRS has some compromise offers in such cases that provide the opportunity of a fresh start to the troubled taxpayers. These are called as compromise offers where in an offer amount is determined by the IRS based on the inability of the taxpayer to make payments. The present financial condition, the capability to make payments and equity in assets of the taxpayer is taken into consideration while deciding the amount. If the taxpayers meet the criteria specified, he or she gets qualified for the IRS compromise offer. A substantial amount of money in taxes, penalties as well as interests can be saved by taxpayers if they qualify for the offer.
Basically, there are three different kinds of IRS compromise offers which include:
1) Cash Offer – In this offer, the taxpayer has to make the payments of the tax debt within 5 months after the offer has been accepted.
2) Short Term Deferred Offer – The short term offer provides a period of 24 months or 2 years to the taxpayer so that the tax debt can be paid off in equal installments on a month to month basis.
3) Long Term Deferred Offer – In this offer, the taxpayer can clear off the tax dues with monthly installments over a period that is still remaining on collection statute.
If you find yourself in a situation where you feel that the tax debt is huge and cannot be paid by you in one straight go, the best option is look for one such compromise offer. In order to make sure that you qualify for an offer, approaching an IRS tax attorney is recommended. The IRS tax lawyers are aware about all the aspects of IRS compromise offers and are at the best position to help you out of this critical problem. Overall, an IRS compromise offer is definitely a blessing for any taxpayer who is facing enormous IRS tax debt.