Did you recently get a tax bill from the IRS that you can’t pay? Or maybe you’ve owed back taxes for some time and are facing levies, garnishment or asset seizures?
It can be overwhelming to resolve your debt with the IRS, particularly if you’re struggling financially. Fortunately, there are relief options to help you get back on track. And if they don’t work for you, a tax debt relief company could be aware of viable alternatives to keep you out of the hot seat with the IRS.
What is Tax Debt Relief
Tax debt relief isn’t a particular offering or program. It’s a concept used to describe options available to taxpayers who owe back taxes and would like to resolve their unpaid tax debt with federal and state taxing authorities.
Owe over $25k in personal or business taxes? Get a free consultation with BBB Accredited “A+” rated Larson Tax Relief. With 15 enrolled IRS Agents on staff, they can help you with wage garnishments, tax levies & liens, stop IRS collections, resolve back taxes and more.
Tax Debt Relief Programs and Options
If you owe the IRS, there are several options to help resolve your federal tax debt.
The IRS Fresh Start Program
The IRS Fresh Start Initiative (formerly known as the Fresh Start Program) caters to individuals and businesses struggling to pay their tax debt. It includes the following relief options:
Offers in Compromise (OICs)
If you’re experiencing financial hardship, you could qualify for a tax settlement. It’s referred to as an Offer in Compromise (OIC), and the IRS could agree to settle your unpaid tax debt for a portion of the total outstanding balance.
There are three types of OICs:
- Doubt as to Collectibility: the taxpayer lacks sufficient income and assets to pay tax debt within the statutory period
- Doubt as to Liability: the tax examiner misinterpreted the tax code to assess liability or failed to review the evidence presented by the taxpayer. Consequently, there’s legitimate doubt that the taxpayer actually owes the assessed tax liability.
- Exceptional Circumstances (Effective Tax Administration): the taxpayer is dealing with an extenuating circumstance, and paying back taxes would be unfair, inequitable or result in serious financial hardship
You also want to file all legally required returns and be current on mandatory estimated tax payments for the current year to qualify.
IRS Payment Plans
IRS installment agreements allow you to take care of unpaid tax debt over a set period. Here’s a breakdown of your options:
- Short-Term Payment Plan: reserved for taxpayers who owe less than $100,000 (including penalties and interest) and can pay the outstanding balance within a 120 to 180-day period
- Long-Term Payment Plan: reserved for taxpayers or businesses who owe no more than $50,000 or $25,000, respectively, and can repay the outstanding balance in six or fewer years
- Extended-Term Payment Plan: the terms of this installment agreement depends on what the taxpayer can afford, as determined by the IRS, once income and expenses are taken into consideration
Currently Not Collectible (CNC) Status
You could qualify for CNC status if the IRS determines that the level of your income, expenses and assets make it impossible for you to afford tax payments. If you’re eligible for CNC status, the IRS will defer tax payments and assess your finances annually to determine when repayment can commence.
Owe over $25k in personal or business taxes? Get a free consultation with BBB Accredited “A+” rated Larson Tax Relief. With 15 enrolled IRS Agents on staff, they can help you with wage garnishments, tax levies & liens, stop IRS collections, resolve back taxes and more.
Tax Relief Companies
Tax relief companies are for-profit entities that assist individuals and businesses with federal and state tax issues.
Should I Hire Someone to Help?
If you’re struggling to resolve tax debt or confused about your options, it’s worthwhile to hire professional help. Consider an established tax relief company to help you evaluate your options and make an informed decision regarding the best course of action to resolve federal or state tax issues.
How Do Tax Debt Relief Companies Work?
Most tax debt relief companies work with individuals and businesses to find relief from overwhelming tax debt. Here’s how it usually works:
- The taxpayer requests a free consultation.
- During the initial meeting, a representative reviews the taxpayer’s financial situation and advises on the best course of action.
- The taxpayer works directly with the debt relief company until their tax-related issues are resolved.
How Much Does Tax Relief Services Cost?
It varies by firm but could range from a few to several thousand dollars. Some charge a flat fee, while others charge a percentage of the amount owed to the IRS.
How to Determine if a Tax Debt Relief Firm is Legitimate
Before you hire a tax debt relief firm, consider the following:
- Does the firm operate in your state?
- Is the firm BBB accredited? If so, what’s their rating?
- How many years has the firm been in business?
- Are there client success stories?
- What do reviews from past and current clients reveal about how the firm does business?
- Does the firm employ enrolled agents?
- Is there a fee for consultations?
Larson: Tax Relief Services
If you’re ready to take the first step towards resolving your tax debt, explore what Larson Tax Relief has to offer. The firm specializes in defending individuals and businesses against tax authorities and protecting their assets.
Larson Tax Relief was founded over 16 years ago and currently operates in all 50 states. The team consists of 17 enrolled agents and tax lawyers who are well-versed in federal and state tax codes.
If you’re an individual facing tax audits, levies, asset seizures, liens, wage garnishments or need help with installment agreements or OICs, Larson Tax Relief can assist. The firm is also available to businesses of all sizes with installment agreements, levy reversals, OICs and tax liens.
Call 833-833-4151 or complete the online form to get your free evaluation. During the call, a representative will review your options and rights as a consumer or business owner. Most importantly, you’ll have the information needed to make an informed decision, and there’s no obligation to move forward.
