| It's no secret that settling taxes owed is a challenging | | | | Reasonable Cause for not being able to pay Taxes |
| endeavor. With mounting job loss and a decreasing | | | | owed. |
| market for employment, many taxpayers cannot | | | | Reasonable Cause can include: |
| afford to pay their Taxes. However, taxpayers that | | | | - Loss or Destruction of Tax Documentation or |
| display reasonable need may be able to Settle Taxes | | | | Records |
| Owed for Less. | | | | - Natural Disasters (Hurricane, Flood, Tornado, Etc.) |
| When can you Settle for Less? | | | | - House Fires |
| The IRS will will look at the following factors when | | | | - Serious Illness |
| determining if you can settle your taxes owed for less | | | | You need the following IRS Forms to apply for Penalty |
| the the total amount owed. | | | | Abatement: |
| - Doubt as to Collectability: You can't pay your bill now | | | | - Form 843, Claim for Refund and Request for |
| or in the near future. | | | | Abatement |
| - Doubt as to Liability: You are not at fault for the IRS | | | | 3) Partial Payment Installment Agreement |
| Tax Debt. | | | | This is a relatively unknown way to pay on IRS Debt |
| - Effective Tax Administration: Collecting on the debt in | | | | likely because it was implemented by the IRS starting |
| full would cause an economic hardship. | | | | in January of 2005. Partial Payment Installment |
| - Reasonable cause for not paying/filing | | | | Agreements allow taxpayers to pay less than the full |
| The following are ways in which you can settle your | | | | amount of the Tax Debt, with one important |
| taxes for less if you meed any of the above | | | | drawback. The payments are stretched over a long |
| qualifications. | | | | period of time, up to 10 years. |
| 1) Offer in Compromise | | | | Because this is a fairly new payment option, the IRS |
| In order to submit an Offer in Compromise you need | | | | has not issued any official publications on how to apply |
| the following IRS Forms: | | | | for it. Here's what to do: |
| - Form 656-A "Offer in Compromise" | | | | - Fill out Form 9465, Installment Agreement Request |
| - Form 656-PPV, "Offer in Compromise Payment | | | | - Fill out Form 433-A, Collection Information Statement |
| Voucher" (For $150 Application Fee) | | | | Mail this information to the IRS, along with a letter |
| - Form 433-A | | | | request a Partial Payment Installment Agreement. |
| It may take a couple of months for the IRS to process | | | | Include any documents needed to back up your |
| your application. If you have not heard back from the | | | | assertions. |
| IRS two months after you submitted your offer, | | | | 4) Working with Professionals |
| consider calling them to check your application's status. | | | | An experienced Tax Professional knows their way |
| 2) Penalty Abatement | | | | around the IRS better than the average Taxpayer. |
| If you are not liable for the debt owed or not liable for | | | | They have a higher chance of getting your Tax Debt |
| filing/paying your taxes late, you are a likely candidate | | | | amount reduced. Additionally, hiring a professional can |
| for Penalty Abatement. Basically, you need to provide | | | | also save you time and money. |