Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call:
212-235-1537 or toll-free at 866-712-9505.

Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call: 212-302-9400 or toll-free at 844-653-2873.

Serving Individual And Corporate Tax Clients Nationwide From Our New York, New Jersey, Florida And California Offices

Steven Goldburd and Benjamin A Goldburd

Since 1983, our tax firm has skillfully represented individuals and corporations across the United States and around the globe from our offices in New York, New Jersey, California and Florida.

Understanding IRS Tax Relief: Types And Benefits

The IRS tax code can be complex and confusing. For many individuals and businesses, dealing with taxes can be a source of anxiety and stress. Fortunately, options are available for taxpayers struggling to pay their tax bills. One such option is IRS tax relief, which can provide much-needed relief to those facing financial difficulties.

What Is Tax Relief?

Tax relief refers to programs and initiatives that can help taxpayers reduce or eliminate their tax debts. These programs offered by the IRS can be particularly beneficial for those experiencing financial hardship, including individuals who have lost their jobs, or experienced a medical emergency and businesses struggling to make ends meet.

What Are The Different Types Of Tax Relief?

There are several different types of tax relief programs available to taxpayers. These include:

  • Installment agreements: Installment agreements allow taxpayers to pay their tax debts over time rather than in a lump sum. These agreements can benefit those who cannot pay their tax bills in full, as they provide a structured payment plan to make managing the debt more manageable.
  • Offer in compromise: An offer in compromise is a program that allows taxpayers to settle their tax debts for less than the total amount owed. This program is generally only available to taxpayers experiencing financial hardship or unable to pay their tax bills in full.
  • Currently not collectible status: Currently the not collectible status is a program that allows taxpayers to suspend collection efforts by the IRS temporarily. This program is typically only available to those experiencing significant financial hardship, such as those who have lost their jobs or experienced a medical emergency.
  • Penalty abatement: Penalty abatement is a program that allows taxpayers to request a reduction or elimination of penalties associated with their tax debts. This program is typically only available to those who can demonstrate reasonable cause for failing to pay their tax bills.

Navigating these options can be an overwhelming process. It is essential to have a skilled tax attorney who can help you understand your options for tax relief.

How Much Does It Cost To Apply For An Offer In Compromise?

For individuals and businesses filing an offer in compromise, the initial application fee is $205. Individuals who meet the Low-Income Certification guidelines may be excluded from paying this fee.

What Grounds Need To Be Present For The IRS To Accept Your Offer In Compromise?

There are three reasons why the IRS would accept an offer in compromise. Here is what you should know about each:

  • Doubt as to liability: A taxpayer may believe that they do not owe a debt and can prove it with relevant evidence.
  • Doubt as to collectability: A debt may not be collectible because the taxpayer can not pay the debt in full.
  • Effective tax administration: A taxpayer may owe a debt and have the finances to afford it, however, doing so would present economic hardships for the taxpayer.

Knowing why our client needs to file for a compromise program is the first step to making a successful offer to the IRS.

How Do You Pay A Successful Offer In Compromise?

Once we help you reach a successful offer in compromise, we can move on to payment plans. The IRS provides two payment options:

  • Lump sum cash offer: With an initial payment of 20% of the total offer amount, you can pay the remaining balance in five or fewer installments.
  • Periodic payment offer: Regular payments can be made while the IRS reviews an offer in compromise, which are continued after an offer is successful until a debt is paid in full.

One of our tax lawyers can help discuss which payment plan suits your needs.

What Options Do You Have If The IRS Rejects Your Offer In Compromise?

Applicants have 30 days to appeal a rejected offer in compromise. Our lawyers want to see that your offer in compromise is successful and can help prevent or appeal a denial.

How Much Should You Offer The IRS In An Offer In Compromise?

The IRS is only likely to accept offers that amount to “reasonable collection potential.” This term refers to the amount the IRS could likely collect, based on your assets and anticipated income. Reasonable living expenses are excluded from your income, and your assets will only count to the extent that you have equity in them.

There are many other nuances to this calculation. It’s critical to work with an attorney in submitting an offer that the IRS is likely to accept.

Who Qualifies For An Offer In Compromise?

To qualify for an offer in compromise, you must have:

  • Filed all of your required tax returns
  • Obtained an extension for the current year
  • Made your estimated tax payments, if any, for the current year
  • Made federal tax deposits for the current and last two quarters (if you’re an employer)

Additionally, you will only qualify for an offer in compromise if you can’t afford to pay your full tax debt through installment payments. You won’t qualify if you’re currently in bankruptcy proceedings.

How Can You Request Penalty Abatement From The IRS?

In your notice from the IRS, you will find instructions on how to request a penalty abatement. You can start by calling the number listed on the notice. The IRS may be able to approve your abatement over the phone.

If they can’t do so, you will need to file Form 843, which includes an explanation as to why you should be granted an abatement. A lawyer can help you file this form and specify strong grounds for an abatement.

Can Any Individuals And Businesses Pay On An Installment Plan?

It depends on your situation and the amount of your tax debt. Generally speaking, you can qualify if you can’t afford to fully pay your tax debt within 180 days. Businesses can qualify if they meet certain criteria. An attorney can assess whether you’re eligible.

Get The Fresh Start You Need

Tax debts can be a significant burden. If you’re struggling financially, IRS tax relief programs can give you the fresh start you need. It’s well worth the effort to explore which options might be available to you.

Talk To Our Skilled U.S. Tax Attorneys

If you are struggling with tax debt and need assistance, Goldburd McCone LLP can help. Our experienced tax attorneys can provide a case evaluation and help you determine the most favorable course of action for your situation. Contact us online or call 212-302-9400 or toll-free at 844-653-2873 today to learn more about our tax relief services. We can serve you nationwide from our offices in New York, New Jersey, Florida and California.