Tax Refunds & Advice

Believe or not, the IRS may agree to accept less money than what you actually owe. This is known as an offer in compromise, and it is something that you should consider looking at if you are not able to pay your entire balance. Can everybody do this? Definitely not. The IRS only offers this to people who can prove that they are in a bad financial position.

Do I qualify? There are three types of offers in compromise. If you fit the guidelines of one or more of them you may be able to file the proper form and pay less than you owe to settle your account.

The three types include: doubt as to collectibility, effective tax administration, and doubt as to liability. You need to know more about each type of offer in compromise if you are going to move forward.

Doubt as to collectibility means that the IRS doubts that you will ever be able to pay in full. They would rather collect what they can than nothing at all.

To be eligible for the effective tax administration offer in compromise you need to show the IRS that paying the total liability will put you in a very bad financial situation.

Finally, doubt as to liability can be taken advantage of if the tax examiner made a mistake or if you have new evidence to present.

As you can see, the IRS is not going to agree to an offer in compromise with everybody who asks. But they will work with you if you meet one of the requirements listed above. Why not consider an offer in compromise? The worst that could happen is that you learn from the IRS that you are not eligible. It never hurts to try if you feel that you have a legitimate case. 

Do you owe the IRS money? There are many ways to pay them, and the best is in a lump sum. When you pay every penny that you owe at once the IRS will immediately put your account in “good standing.” And when your account is in this status you do not have anything to worry about for the time being.

If you have enough money in cash you can easily pay what you owe in one lump sum. You may not want to part with a large amount of cash, but it is something you must do if you want to satisfy your debt to the IRS. How much money do you have available? Enough to pay all that you owe without harming other areas of your life?

Even if you do not have enough money you can still pay in one lump sum. This can be done by taking a loan. You can ask friends and/or family for the money or you can get a loan from your bank. Does this make sense? It sure does. Even though you will still owe somebody money, such as the bank, you are not dealing with the IRS. And when you are not dealing with the IRS you are in a better place. Remember, they can do many things that a bank cannot. For instance, the IRS can place a lien on a property, levy your wages, etc.

The IRS wants their money from every taxpayer. If you owe anything, no matter how much, you can pay in one lump sum. This allows you to escape the grasps of the IRS for good (or at least until next year.) Now that you know your lump sum payment options you should be able to make the right decision.