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Are you unable to pay what you owe and seeking tax debt relief? Have you considered a tax settlement to help you get a handle on your finances?
While it’s true that the IRS appears to be a big, scary, all-powerful entity that could (in theory) take your money, your assets, and even your home, wage garnishment and tax levies are actually the last resorts to collect unpaid tax debt.
In reality, the IRS is often happy to reach an agreement that gives the agency a portion of the tax money owed and allows the IRS to close out your case. Such an agreement is called a tax settlement. (And the same goes for state tax debt. Your state tax organization is most likely willing to listen to a settlement offer, too.)
A tax settlement may allow you to settle your case for less than the original amount of money owed. You might also negotiate for a more favorable payment plan.
In 2019, Solvable launched the Solvable Scholarship, to help the next generation of taxpayers start their journey of financial independence and freedom. To apply, students must write an essay about what personal financial freedom meant to them.Our fall 2021 Scholarship winner embodied Solvable's values of hard work and grit. Congrats to our Spring 2021 winner, Claire W. from Truckee Meadows Community College. Read her essay below!
Solvable Spring 2021 Scholarship Winner
When I divorced, my credit score was 468. I had no money in the bank. I hadn’t had a job in
four years. With two small children to care for and everything to lose, I made a list and got to
work.We were staying with my mom, ...
If you’re struggling to pay the full amount of your tax debt, an Offer in Compromise is a potential solution. It’s an agreement between you and the IRS in which the IRS will agree to take less than what you owe in exchange for you paying off at least some of your tax debt. After you make the necessary payments, the IRS will consider your tax debt officially paid off.The IRS will sometimes accept less than what you owe in order to help taxpayers settle debts and receive some of the debt that may soon expire (tax debt can be collected for up to 10 years).There are two types of Offers in Compromise:*Lump Sum Offer: You are ...
If you owe the IRS an outstanding tax bill and you’re struggling to pay the full amount -- even in smaller installments -- an Offer in Compromise might be the right solution for you.An Offer in Compromise is an agreement between you and the IRS in which the IRS agrees to accept less money that you owe in exchange for you paying off your tax debt. Once you make the agreed-upon payments, your IRS debt will be officially paid off.You might wonder why the IRS would accept less than what it’s owed, but the reason is straightforward: ultimately, an Offer in Compromise helps the IRS collect the money it’s owed while helping taxpayers settle their debt and avoid ...
In today's media, there is a lot of discussion about the student loan and mortgage crises but the issue of unpaid back taxes, sometimes referred to as tax debt, is a topic that receives little attention - despite affecting over 11.2 million Americans, according to a 2019 IRS report.Taxpayers who owe money to the IRS can face serious consequences if they do not pay their outstanding tax balance. Collection activity by the IRS can be intimidating and frightening for taxpayers, escalating in severity from tax liens to wage garnishments and ultimately property seizure to cover the balance owed. Using IRS data, Solvable & GoBankingRates tracked the enforcement & settlement activity on unpaid back taxes over 10 years from 2009 ...
Installment Agreements are the most popular IRS tax debt resolution plans. There are a variety of Installment Agreements that the IRS offers, including Guaranteed Installment Agreements, Streamlined Installment Agreements, Non-Streamlined Installment Agreements, and Partial Payment Installment Agreements. Each payment plan has specific qualifying factors. In a Guaranteed Installment Agreement, you can pay your tax debt in monthly installments if you owe $10,000 or less in tax debt.
What is a Guaranteed Installment Agreement?
A Guaranteed Installment Agreement is an IRS tax debt payment plan which allows payment of full tax debt in installments within 36 months. You can only qualify for it if your tax debt is $10,000 or less. When calculating the total tax debt in order to qualify, ...
What is the IRS "Ability to Pay" and How It Impacts Tax Debt Reductions
Taxpayers in tax debt often consider IRS tax debt reduction plans to get back tax relief. In order to get relief, one important consideration is the "ability to pay." The IRS considers the paying capacity of the taxpayer before agreeing to reduce their back taxes. Any taxpayer wanting to reduce their tax debt needs to check if they fulfill this IRS condition.
What is the IRS "Ability to Pay"?
The IRS offers a reduction in tax debt through their tax debt reduction plans such as an Offer in Compromise and a Partial Payment Installment Agreement. For both these back taxes reduction plans, the ...
What is an IRS Streamlined Installment Agreement?
If you owe back taxes, you have the option of paying the full amount you owe in installments. Most taxpayers qualify for an installment agreement because it has simple qualifying criteria. If you have the ability to pay your full back tax amount, then installment agreements can be the right choice for you. A Streamlined Installment Agreement is a type of installment agreement where you pay your tax debt within 72 months if you owe less than $50,000 in back taxes.
How to Qualify for a Streamlined Installment Agreement
A Streamlined Installment Agreement is only for those taxpayers that owe $50,000 or less in back taxes. You can calculate the total amount of ...
How to Choose the Right Tax Attorney for your Tax Problem
If you are facing a tax issue, you can hire a tax attorney, a certified public accountant (CPA), or a tax resolution company for a resolution. These tax professionals and services assist in solving different kinds of tax problems. A CPA is suitable for problems concerning tax returns, while a tax lawyer can help you with representation, communications with the IRS, tax debt issues, litigation, and so forth. Therefore, depending on the problem at hand, you will need to hire the right tax professional for the job.
Where to Begin Looking for a Suitable Tax Attorney
To find a professional and competent tax attorney, you can ask for a ...
You may need help from a tax attorney for resolving a variety of tax issues. It may be handling a complicated IRS audit, back tax resolution, communicating with the IRS, or representation before the IRS. When you begin looking for a tax attorney, one of the prime concerns you have is about the cost.
The Cost of Hiring a Tax Attorney
Just like a doctor charges you differently for different illnesses, similarly, there typically is no set fixed fee for a tax attorney. Depending upon how complicated or straightforward your tax problem is, a tax attorney can charge you from $200 to $400 and beyond per hour. The fee can be close to a thousand dollars an hour for very ...
Many people looking to resolve their tax problems often get confused about whether to hire a tax attorney or a tax relief company. Both can resolve tax problems; both are experts in their field. Then which is a better choice?
How to Choose between a Tax Relief Company and a Tax Attorney
The one major difference between a tax relief company and a tax attorney is that a tax relief company is a collective of professionals, including tax attorneys, tax professionals, and many times enrolled agents and Certified Public Accountants (CPAs). On the other hand, a tax attorney is a tax lawyer specializing in tax laws and tax codes, and can represent taxpayers before the IRS and in court.Whether ...
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We hope that you find Solvable helpful in your efforts to get a fresh start.
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Congrats! You're One Step Closer To Resolving Your Tax Debt.