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IRS Tax Relief – IRS Forgiveness – Offer in Compromise

If you owe the IRS and can’t pay, you may qualify for the IRS Debt Forgiveness Program. The IRS Forgiveness Program is officially called an Offer in Compromise. The Offer in Compromise program is the ultimate IRS Tax Relief option.

Under certain circumstances, financially struggling taxpayers can have their IRS tax debt partially forgiven. The IRS will never take 0 dollars as a settlement. The IRS will go as low as $100 as a total settlement. When the IRS considers “IRS Forgiveness”, the present financial condition of the taxpayer is of primary importance. That means the IRS cannot collect more than a taxpayer can pay. If any collection action by the IRS would force a tax debtor into a financial crisis, the IRS cannot collect the back taxes.

IRS Tax Relief – IRS Forgiveness – Offer in Compromise

Taxpayers that have the resources to pay only a partial amount of their tax debt can apply to the IRS government payment plan called an Offer in Compromise to resolve the remaining amount. Depending on the financial capacity of the taxpayer, the IRS significantly reduces the total debt to an amount that the taxpayer can pay. This reduced amount can be paid in a lump sum or in fixed monthly installments.

IRS Tax Relief – Fresh Start Initiative is an “Expansion” of the Offer in Compromise Program

To make it easier for taxpayers to qualify for an IRS Forgiveness in the Offer in Compromise program, the IRS has expanded their Fresh Start Initiative. Under these more flexible rules, taxpayers do not have to disclose extensive financial details to the IRS to judge their paying ability. The Fresh Start Initiative for IRS Forgiveness offers financially struggling taxpayers the following advantages:

  • The IRS now looks at only one year of future income for offers if they are paid in five or fewer months when calculating a taxpayer’s reasonable collection potential. This is down from previous four years. For agreements of six to 24 months, the IRS now looks at two years of future income instead of the previous five years.
  • Taxpayers are now allowed to make their student loans’ minimum payments for post-high school education loans guaranteed by the federal government.
  • Taxpayers may, under certain conditions, pay delinquent federal and state or local taxes in monthly installments if they cannot pay it in full.
  • The standard allowance for the Allowable Living Expense amount has been expanded. This allowance now includes credit card payments, bank fees and charges, and other miscellaneous allowances.

What Should You Do Next?

Understanding your IRS tax debt and dealing with the IRS isn’t easy to do alone, even with programs like IRS Forgiveness. Luckily, there are IRS Tax Relief professionals at Flat Fee Tax Service, Inc. who can help you navigate your IRS Forgiveness options.

FLAT FEE TAX SERVICE, INC. – Good People – Doing Great Work


IRS Fresh Start Initiative – IRS Offer In Compromise Settlement

The IRS, in 2012, expanded their Offer in Compromise program with its Fresh Start Initiative, to help financially struggling taxpayers who are unable to pay their taxes due to financial difficulties. The Fresh Start Initiative, in addition to providing income tax relief to American taxpayers, also helps the IRS keep a check on the number of tax default cases, as it encourages more taxpayers to settle their old income tax debt so they can resume tax compliance.

What Qualifies You For The Fresh Start Initiative?

The IRS, under the Fresh Start Initiative, provides a number of options to financially distressed taxpayers.

1. IRS Penalty Relief

The Fresh Start Initiative allows eligible taxpayers up to a 6-month extension to pay their taxes. The IRS penalty for not paying income tax debt by April 15 is waived off until October 15. If, however, the taxpayer fails to pay their income taxes beyond the revised date, a penalty is charged.

The IRS penalty relief is available to two categories of taxpayers

  • Wages earning individuals who have been unemployed for a minimum of 30 consecutive days.
  • Individuals who experienced a dip of 25 percent or more in their income due to a slowdown.

Fresh Start Qualification Criteria

If you are married and filing jointly, your adjusted gross income must not exceed $200,000. If your filing status is single, qualifying widower, head of household, or married filing separately, the adjusted gross income must not exceed $100,000. In addition, if you have an outstanding of more than $50,000, you will not be qualified to receive a waiver.

2. IRS Installment Payment Plan

The IRS Installment Agreement provision allows taxpayers to pay their income taxes, in installments, in a scenario wherein the taxpayer is unable to pay in full. It also gives taxpayers more time to pay. The threshold for the maximum amount of debt against which an installment plan can be prepared has now gone up from $25,000 to $50,000, with the maximum term for the repayment of installments being 6 years. Though you need to pay less in penalties, the interest will continue to accrue on your outstanding dues.

Taxpayers can set up an installment agreement with IRS by using the Online Payment Agreement (www.irs.gov) without any intervention of an IRS agent. It is, however, essential that they agree to pay the installments through a direct debit mode.

3. Offer in Compromise (OIC) IRS Settlement

The Offer in Compromise provision allows financially struggling taxpayers to settle their outstanding income taxes for less than what they actually owe to the IRS. After the expansion of “Fresh Start” initiative, it has become easier for taxpayers to qualify for an Offer in Compromise settlement, as the IRS has relaxed the qualification standards, and therefore, more people are now eligible to settle with the IRS for less.


To apply for an Offer in Compromise (OIC) settlement, the taxpayer needs to file Form 433-A (OIC) or Form 433-B (OIC), and deposit a non-refundable application fee of $186. If, however, the taxpayer qualifies under the Low Income Certification guidelines, they would not have to pay the application fee. In addition to the form and application fee, the taxpayer may also be asked to pay the first month’s installment or 20 percent of the settlement amount, at the time of filing.


IRS Settlement – Durham NC

ANNOUNCEMENT: Our team of IRS tax relief professionals negotiated another successful Offer in Compromise settlement. Our clients, Alfred and Veronica Ray from Durham, NC have settled their $17,000 income tax debt for $2500. Our team did a fabulous job and our clients received the Fresh Start they deserve.

Who will be receiving a successful IRS settlement? It could be you.GREAT NEWS