Solutions

Installment and Agreements

If you are unable to borrow or liquidate assets to pay the liability you may qualify for an installment agreement. Installment agreements are not restricted to individual taxpayers, but can also be used by corporations. The IRS may request a personal financial statement and if a business is involved then you will need to provide a business financial statement also.

The IRS will compare your income against your expenses to determine the amount of disposal income available to pay the liability. In the case of an installment agreement for an individual taxpayer the IRS may limit some of your expenses based on their "national standards". The difference between your monthly gross income and allowable expenses are what you pay for the monthly installment payment. Interest and penalties continue to accrue on the liability until paid in full.

Penalty Abatement

You might have a chance to get the penalties that the IRS has issued to you abated. The IRS's requirements for penalty abatement differ with each case. So if you have good reason to request penalty abatement then you should request one. If the request is accepted then you could have your penalties partially or completely removed. Each year the IRS abates tens of millions of dollars in penalties.

Appeals

If you do not agree with a decision from an audit then you have a right to file an appeal. The appeal is sent to the IRS Appeals Division where an Appeals Officer will hear both opinions and will come to a conclusion.

A Collection Appeal is an appeal that is filed when a warning has been given to the taxpayer that a levy or seizer is about to take place. The collection appeal is a chance for the taxpayer to come up with another way for the liability to be resolved. An appeals officer is assigned to the appeal and will respond to the appeal within five days.

It is important that you file the appeal within the time frame and follow the guidelines given because if there is an error you could lose you chance for an appeal.

Offer In Compromise

Doubt to Collectibility

An Offer in Compromise gives the taxpayer a chance to make a compromise on the amount owed to the IRS. Most Offers in Compromise that are accepted are about 14 cents on the dollar. This could save you hundreds to thousands of dollars. If the compromise is accepted and payment is made the tax lien will be released. A compromise is accepted or rejected based on your current financial situation, equity in assets, and ability to pay. If the Doubt to Collectibility offer is not accepted then you will have the right to file an appeal.

Doubt to Liability

A doubt to liability is filed on the same form as the doubt to collectibility except that it is filed when you feel that you should not owe the liability. You will also have to provide documentation to support your claim. This offer is reviewed in the Examination Division. If the Doubt to Liability offer is not accepted then you will have the right to file an appeal.

Innocent Spouse

It has come to the attention of the IRS that there are times when one spouse should not be liable for the problems that their spouse or ex spouse has with the IRS. If the innocent can prove they fit the guidelines that the IRS has set forth then they might not be responsible for some or all of the tax liability.