Behind In Your Tax Debt to the IRS? Try Negotiating
Tax Debt to the IRS? Try Negotiating
Do you remember that part in the movie A Christmas Story where Ralphie, as the narrator, proclaims in reference to his father: “The old man loved bargaining as much as an Arab trader…and he was twice as shrewd”? Well, if you enjoy a good bargain or barter, then this might be the news you want to hear. While some people would avoid contacting the IRS at all cost, there are others who are always ready for a challenge, especially if some good old bartering is involved.
Let’s Make a Deal
So what if you find yourself on the wrong side of the IRS’s account? Do you owe the IRS money? Is your account delinquent? Well, it just so happens that those bartering skills could come in handy for you. The IRS is no pushover, by any means, but if you play your cards right, then you could find yourself walking away with a settlement that could be much easier to pay off.
Offer In Compromise
While it’s best to avoid getting behind in your taxes, if you’ve reached that point and it appears that there is no end in sight then you can always plead your case and ask for leniency. That’s because the IRS has set up a program called “offer in compromise.” This program assists delinquent taxpayers by setting up payment plans designed to make paying off tax debt easier. If you as the taxpayer can prove that you don’t have the ability to pay off your debt then you might be able to convince the IRS that you need help. You will have to make the tax agency an offer and they can either accept it or reject it.
There Are Positive Signs
While the paperwork can be a real burden to fill out, the good news is that the IRS appears to have become a lot more accommodating in recent years. In 2010, the federal tax agency only accepted about 25 percent of the offers they received from people who owed back taxes. However, just three years later, in 2013, that number had jumped all the way to 42 percent. Therefore, if you can survive the paperwork, then you’re chances of getting the IRS to compromise in your favor appear to have improved significantly.
The Waiting Game
One thing that you must show as a delinquent taxpayer is that you are unable to pay your bill because you simply do not have the funds. However, as with many things associated with the IRS, it can take a long time to receive a reply. In fact, the agency has up to two years to respond, which can be excruciating for the applicant. However, if they fail to respond after 24 months, then the offer is automatically accepted. In many cases, the IRS wants to wait and see if your financial situation improves over time and thus enables you to pay off the full debt.
Need Help Applying
If you owe back taxes and you can prove that you don’t have the financial means to pay off your debt, then now might be a good time to meet with us so we can help you prepare an “offer in compromise” for the IRS. We can help you make the right offer and improve your chances of acceptance. So give us a call at 1-877-CPA-2006 or click here to contact us.
We hope you found this article about “Behind In Your Tax Debt to the IRS? Try Negotiating” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
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