Can You Settle With The Irs For Less Than You Owe?

By Manuel Davis Jr

If you want to settle with the IRS for less than you owe, there are several ways to go about it. While none of them is guaranteed to get you the result that you are hoping for, you should be willing to consider all your options to ensure that you get the best possible outcome. Once you look into how you can settle with IRS, you will have a much better idea of where you stand, how to move forward, and whether or not you are actually going to succeed.

What does it mean to settle with the IRS for less than you owe? This is exactly what it sounds like. The IRS may let you pay them less than the total due because they feel that this is the best deal for them.

One of the most common ways to settle for less is to apply for a partial payment installment agreement. To qualify for this you need to owe at least $10,000. With this the IRS will determine how much your monthly payments should be – this is based on the Collection Information Statement that you are required to complete. It is important to note that the IRS will not let you settle for less than you owe if they find that you have money or assets that exceed the amount owed. After all, they want to get all of their money if at all possible.

Another method to consider is an offer in compromise. If you are interested in settling your back taxes for pennies on the dollar, this is the method that you should consider first. The main issue with an offer in compromise is that the IRS only accepts 10 to 15 percent of those received. In other words, you do not have a very good chance of this happening unless you can prove to the IRs that you meet one of the following requirements: doubt of liability, doubt of collecting liability, or effective tax administration.

Finally, don’t overlook the benefit of penalty abatement. This has nothing to do with the balance of taxes you owe. That being said, it can help wipe out some or all of the penalties that you have collected. In some cases this could be thousands of dollars.

Do you need help in your attempt to settle back taxes with the IRS? If so, you should hire a tax professional the second that you realize this is a possibility. A professional can guide you through the process, helping you save money in the end.

In short, you can settle with the IRS for less than you owe. You should consider a partial payment installment agreement, offer in compromise, and/or penalty abatement. There are no guarantees, but at the very least you are exercising all of your options.

If you can settle with IRS you might as well do so. In short, this means that you are paying less than what you owe without any fight from the IRS. As you can imagine, this is an ideal situation for those who owe back taxes.

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