Can I settle my taxes for a lower amount?
Lots of companies advertise tax reduction programs offered by the IRS. The most widely advertised program is called an Offer in Compromise (OIC). The IRS actually has three different OIC programs. Unfortunately, many of the sales representatives at tax resolution firms only know about the first category called Doubt as to Collectability.
We look at all three types of OICs to see if you qualify. We also look at other methods for reducing your tax debts like amended tax returns, audit reconsideration, innocent or injured spouse programs, Section 6015 equitable relief, penalty relief, bankruptcy, and partial-pay installment agreements.
Other alternatives exist like the Currently Not Collectable (CNC) TC530 Code. If utilized you may be able to delay paying your tax bill for a while until your income rises or the statute of limitations runs out.
We want to help you find the best program for reducing your tax debt. We recommend avoiding bankruptcy since the best tax reduction programs should not affect your credit score.
If you choose to use an OIC to reduce your tax bill, you’ll need to gather financial information and prepare IRS Forms 433-A (OIC) and 656. You can prepare the forms and represent yourself. Be aware, the form preparation is complicated, with lots of rules, and even some planning opportunities. You also sign the forms under penalty of perjury so we recommend hiring a knowledgeable professional to get it right.