Your inability to pay your personal and business debts can be a frustrating experience. This is especially true if your primary creditor is the Internal Revenue Service or IRS. When this happens, it might be difficult to make ends meet and settle your tax obligations for good.
Furthermore, it can also hurt your personal and business’s reputation. Thus, if you struggle with paying your taxes, then a tax settlement offer in compromise might probably be a good idea to get you and your business out of trouble.
Keep reading this article to know a few ways on how a tax settlement offer in compromise can help you and your business.
What Is A Tax Settlement Offer In Compromise?
A tax settlement offer in compromise refers to a federal program that enables an ordinary citizen or a business owner who is having trouble with the IRS to settle their tax debts at a lower price than what they originally owed. It can be a legitimate solution for taxpayers who can’t pay their full tax liability due to some financial issues.
Under a tax settlement offer in compromise, the IRS will take a look at how much tax debts you and your business owe and assess how much you can afford to pay to determine what percentage of your total tax debts you should pay them back. However, you should keep in mind that the IRS will carefully inspect your personal and business finances before you can avail of an offer in compromise. Also, your potential offer should be at least within the reasonable collection amount to settle with the Internal Revenue Service.
On the other hand, it’s also important to know that filing an offer in compromise for personal and business purposes comes with different requirements. To help you know whether you’re eligible for such a tax settlement remedy, using an IRS offer in compromise pre-qualifier tool can be an excellent idea.
What Are The Benefits Of A Tax Settlement Offer In Compromise For You And Your Business?
Now that you’re aware of what a tax settlement offer in compromise is, the next step is to get familiar with how this method can help with your and your business’s tax debts. Below are the benefits of filing an offer in compromise in IRS:
- You Can Avail Of More Affordable Payments
As mentioned, a tax settlement offer in compromise allows you to reduce your overall tax liabilities, especially if you have thousands of dollars in tax debts. Hence, when you avail of this remedy, you’ll have a better chance of paying your tax debts without compromising your wealth.
Moreover, when you take advantage of this approach, you’re able to negotiate a more affordable tax payment, which can be paid either in lump sum or installments. Also, making an offer in compromise means you can protect your income and other assets from possible garnishment by the IRS.
- You Can Free Yourself From Long-Term Collection Of Debt Payments
When you fail to pay your personal and business tax debts, the IRS will not hesitate to put a lien on your income until you settle the whole amount. Consequently, you lose control over your earnings or company income, which can also lead to further financial hardships. This is one of the reasons why a tax settlement offer in compromise is the best thing you can do to stop the collection.
By making an offer in compromise, any lien on your income or business assets will be lifted. From there, you can finally save yourself from the financial stress brought by your inability to pay your tax liabilities to the IRS.
- You Can Resolve A Tax Issue That’s Been There For Many Years
In reality, settling your outstanding tax debt to IRS might take many years before it ends. When this happens, your tax liabilities might have a significant impact on your personal life and business. With your attempts to resolve the problem, you might end up struggling with your finances, which can cause you and your family more stress and anxiety.
Because of this, an offer in compromise can be a beneficial way to resolve tax issues, which have been stressing you and your business out for many years. Once the IRS accepts your offer, you can settle your tax debts and have peace of mind, knowing you no longer owe money to the government. That way, you can focus on achieving financial freedom and growing your business financially through tax planning.
Indeed, dealing with the Internal Revenue Service is never easy, especially if you owe them hundreds to thousands of delinquent taxes. Thus, if you’re looking to free yourself from this stressful financial burden, keep this information in mind so you’ll know how a tax settlement offer in compromise can help you.
In case you need help in negotiating a deal with the IRS, find an experienced tax lawyer who can do that for you. In doing so, you’ll be more confident that everything will be back to normal once you settle your tax debts.
As a full-time blogger for more than fifteen years, Albert Green has been able to gain thousands of loyal readers online. Albert’s content usually talks about business and finance, health and wellness, and self-improvement.