| Full Payment | | | | for this payment plan. |
| The fastest way to resolve owed back taxes is by | | | | Placement on CNC Status |
| paying them in full. This includes paying the interest and | | | | If you cannot afford to pay on your IRS back taxes at |
| penalties that have been assessed by the IRS back. | | | | all, then you might qualify for placement on the IRS' |
| These penalties and interest can quickly add | | | | Currently Not Collectible (CNC) status. However, you |
| thousands of dollars to your tax liability as they are | | | | will need to prove to the IRS that your monthly |
| constantly accruing. If you intend to fully repay the IRS | | | | necessary living expenses exceed your monthly |
| then you should try to do so as soon as possible to | | | | income. |
| avoid additional expenses. | | | | Offer in Compromise |
| | | | The final settlement program offered by the IRS is an |
| By negotiating an Installment Agreement (IA) with the | | | | Offer in Compromise (OIC). With an OIC you submit an |
| IRS, you can repay all, or part, of your total back tax | | | | offer to the IRS detailing what you can afford to pay |
| liability through manageable monthly payments. The | | | | in a lump sump. If the IRS accepts then by submitting |
| specific monthly payment is based upon how much | | | | payment you will resolve your tax debts. However, |
| you owe and how much you can afford to pay. | | | | submitting an OIC requires disclosure of extensive |
| However, negotiating your payment will require a full | | | | financial information in order to prove that you could |
| disclosure of your and your spouse's financial | | | | not repay your taxes fully over the next 4 or 5 years |
| information. Additionally, as with all IRS tax relief | | | | even if the IRS forced the sale of all assets that you |
| programs, you can only enter into an agreement if you | | | | currently own. |
| have filed all your necessary federal income tax | | | | Innocent Spouse |
| returns. | | | | This is a very limited form of tax debt resolution. It is |
| Streamlined Installment Agreement | | | | only applicable when one's spouse files a joint tax |
| This is a special type of Installment Agreement. Again, | | | | return which accrues a tax liability without any |
| the Streamlined Installment Agreement (SIA) is just a | | | | knowledge on the part of the other spouse of what |
| monthly payment paid to the IRS to address your | | | | caused the underlying IRS tax liability. Although it is very |
| back tax liability. The difference is how it is calculated. | | | | limited, it is one in the best forms of tax debt resolution |
| An IA is based upon a comparison of income to | | | | because it completely eliminates the debt, interest, and |
| expenses. An SIA is based upon how much you owe. | | | | penalties from the innocent spouse's IRS account. |
| So long as you owe less than $25,000 and the tax | | | | However, the "non-innocent" spouse still needs to seek |
| liability will not expire in less than five years, you qualify | | | | a different form of resolution. |