Is it possible to negotiate with the irs regarding tax debt issues without applying for an irs hardship or payment plan?

It can be a legitimate option if you can't pay. Frequently Asked Questions About Commitment Offers · Transcript · Appeal your declined offer in. If you can't pay the taxes you owe before the original due date, the balance is subject to interest and a monthly late payment penalty. There's also a penalty for not filing a tax return, so you must file it on time even if you can't pay the full balance.

You should always pay in full as soon as possible to minimize additional charges. A commitment offer allows taxpayers to settle their tax debt for less than the total amount they owe. This may be an option if they can't pay their tax obligations in full or if it creates financial difficulties for them. The IRS considers the taxpayer's unique set of facts and circumstances when deciding whether to accept an offer.

While the IRS generally suspends other collection activities (such as taxing your salary or bank account) while your offer is pending, the IRS can still file a federal tax lien notice to protect your right of retention on any property you own and to notify those interests to other creditors. If the IRS determines that you cannot pay any of your tax debts due to financial difficulties, the IRS may temporarily delay collection by stating that your account is currently uncollectible until your financial situation improves. In addition, the IRS can return your offer to you if you don't respect the application fee or the payment of the offer, or if you don't provide the information requested by the IRS. As part of the accepted offer agreement, the IRS will keep any refunds, including interest, of taxes due until the date the IRS accepts the offer.

If the IRS accepts your offer, but you don't file or pay all your taxes on time for five years after the acceptance, the IRS will notify you that your offer is in arrears and can cancel it and you will owe all of your debt (not the reduced amount of the offer). Keep a careful record of the dates. If the IRS does not refuse, return, or you withdraw your offer within two years of the date the IRS receives it, then the offer will be considered accepted. However, the IRS will send you a notice 30 days from the date of the notification to respond to the IRS request that you reconsider the decision to return the offer.

The IRS will keep any refunds, including interest, for tax periods that extend until the date the IRS accepts your offer.

Antoinette Strang
Antoinette Strang

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