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What You Should Know About Negotiating Your Debt With The IRS

What You Should Know About Negotiating Your Debt With The IRS

This topic may not apply to you, but many people are burdened by the debt they owe to the Department of Internal Revenue. The reasons why an individual may have this type of problem are diverse, including the person having an audit at some point or having the amount owed increasing disproportionately.

There are also those people who do their tax reports but do not pay them on time, allowing their debt to accumulate year after year. It is quite unfortunate, but there are still others who do not file their taxes voluntarily. Therefore, the IRS has to make a substitute tax report, which leads to excessive debt.

If you fall into the above category and have no choice but to seek a settlement with the IRS, it is recommended that you do the following:

1. Prepare and submit your tax reports and/or make your estimated tax payments for the current year. If you are wondering what estimated taxes are, these are the payments that, by law, you need to send to the IRS for each quarter of the year. The amount you have to pay is calculated based on the amount you had to pay in the previous year.
2. Once you comply with the previous point number, you are ready to negotiate with the IRS, but it is important that you do not do it on your own. Negotiating with the IRS is a very complicated process and requires knowledge of the labyrinths of internal procedures that you have to go through. Therefore, your best option is to hire a tax attorney with experience in these procedures. To make the process easier, you can calculate the amount you offer to pay to the IRS for the total amount of your debt before you hire a tax professional.
3. Find out how to calculate your offer and how to know if you qualify to present an offer. Of course, this can be done by the tax professional you hire, but by doing the calculation yourself in advance, you would know for sure if you qualify for this program. In this way, you can be certain about hiring a lawyer, and you will not regret paying the money to be represented.

To check if you qualify to bid, the first thing you need to do is find out what is your net income amount per month (Total Income – Total Business Expenses = Net Income). Then, determine the level of savings per month (Net Income – food, rent, water, electricity, telephone, cable, car payment, estimated taxes, medical expenses = Level of savings).

The amount to offer is determined as follows (Savings Level X 12 Months + Bank Balance = Offer Amount)

If you want to be successful in a negotiation with the IRS, it is very important to know the process and collaborate with your representative.


Taxes at the Wheel


Edic.: 179
Autor: Gustavo Nuñez
Date: 6/2022