Tax Resolution

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If you think you can pay your tax balance within 120 days, the IRS may give you an extension which could reduce interest and penalties.  There is not a set up fee for this payment plan as there are with most other options. 

If it will take longer than 120 days to pay your tax balance, an installment agreement may be your best option.  Generally, an installment agreement must be paid in full within 72 months.  

If you owe more than $50,000 you must submit a financial statement and provide documents supporting income and expenses with your application.

If you can prove paying your tax debt immediately would cause you undue hardship, such as forcing a fire sale of your home, the IRS may grant you up to 18 months to pay.

When applying for the extension, you must include a statement of assets and liabilities, as well as itemized details of the income and expenses you had three months prior to the tax due date. 

 An offer in compromise settles a taxpayer's tax liabilities for less than the full amount owed. Taxpayers who can fully pay their tax balance through an installment agreement or other arrangement, generally may or may not qualify for an offer in compromise.

Reasons for an Offer in Compromise (OIC)

1. Doubt of liability-  If there's a genuine dispute as to the existence or actual tax balance. 
2. Doubt of Collectibility- If the taxpayer's assets and income are less than the full amount of the tax liability.
3. Effective Tax Administration- If the tax is legally owed and that the full amount owed can be collected, but requiring payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.

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