Any Authenticity To The Stories About Neglectful Individuals Who Resolve Back Taxes For A Small Fraction Of The Original Amount?

By Erina Array

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Yes, there certainly is. This is not just the essence of urban lore. It happens over and over through the use of a method that the dreaded Internal Revenue Service, themselves, has come up with to help deadbeat people settle back taxes. The program is known as an "Offer in Compromise", or more briefly an "OIC". The IRS has been known to allow as little as one (yes that's right, the figure "1") per cent of an total payable on a tax bill and call it settled.

These OIC's are entirely up to the government's decision, mainly because there is no authorized entitlement to have a valid tax balance discounted by the IRS. That being said, the IRS must give a properly presented Offer fair deliberation.

Look at the case of Henry who was living on a static income and realized himself in arrears to the IRS for the sum of $13000. That's because a back tax bill can grow at a fast pace with all the additional fees, penalties and interest that they attach to it. These things take on a life of their own after a while. Henry did the smart thing and enlisted the help of a commissioned agent to represent his case to the IRS. The settlement services advisor managed a huge reduction from the full amount of $13000, getting it whittled down to a workable $2000! This was an amount that Henry could be financially able to repay and get back to his life without the IRS stalking him.

If this OIC thing is starting to sound like it could be the way for you, keep in mind that merely wanting to work a deal with the IRS is not enough of a platform. After all, wouldn't everybody like to have his or her tax indenture lessened? You first have to measure up for an Offer in Compromise by showing the IRS that one of these type of conditions exist:

What the IRS calls "Doubt as to Collectiblity". Simply put there is some qualm as to whether they can receive payment of the debt from you.

"Doubt as to Liability". There is some reasonable reservation as to whether you owe the tax bill at all. This one is highly unusual.

Lastly, due to some lessening circumstances, the payment of the full amount would cause you an economic difficulty or would be unfair or unjustified.

The bottom line here is if you think you might qualify for one of these tantalizing reductions in your overdue tax debt, you should seek professional help in making the judgement, and if a good case exists, hire them to act for you before the IRS. This is not a thing you want to do on your own. The aphorism from the law profession " he who acts as his own attorney has a fool for a client" would also fit the case in going before the Internal Revenue Service with an Offer in Compromise.

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