Most people are probably familiar with the Internal Revenue Service or the IRS and the importance of filing yearly taxes. It is important that you understand that if you do not pay your taxes for several years or you fail to pay enough taxes you may end up owing a substantial amount to the IRS. In a lot of cases people are unable to pay the large amount that the IRS demands. Congress asked the IRS to design a special program, known as the Offer in Compromise that is designed to help people legally settle their debts.

The Offer in Compromise Program was developed to assist consumers with settling their IRS debt for less than they actually owe. The taxpayer gets a chance to formally appeal to the IRS for leniency on their tax debts. The IRS has the final say so on whether the individual can have a break. The taxpayer is ultimately responsible for proving that they are financially unable to make full payment on the debt or there is a possibility that the debt reported does not belong to them.

Under these circumstances the IRS can offer plans that benefit financially burdened tax payers. Generally the offer is less than what you really owe but is it important to note that the final amount is calculated using an IRS calculation method. The IRS has 3 main offers that are available to individuals under the Offer in Compromise Program. The first offer they consider is Doubt as to Liability.

The Doubt as to Liability offer is simple because the taxpayer must be able to prove that the tax debt is incorrect. Basically the taxpayer does not believe they owe the money.

The IRS insists that you present evidence to show that you do not owe the money in question. The Doubt as to Liability option is oftentimes simply offered to those who have suffered a case of mistaken identity or Identity Theft.

The second IRS offer is Doubt as to Collectability and it is considered the most common. Basically the IRS has come to the conclusion that no matter how much time they get the individual will not be able to pay the full amount due.

Basically this type of offer is for those situations where the IRS knows that they will probably not be able to collect their entire debt. After taking into account your disposable income as well as your assets the IRS is generally able to come up with a reasonable settlement. The least accepted offer by the IRS and final offer available to taxpayers is the Effective Tax Administration.

Some taxpayers based on their income can afford to pay their tax debt but making them do so might be unfair.

The important point is to find help in one of these situations from someone who knows how to deal with such issues. Going at it alone can cause more trouble than you know. A referral to a quality tax lawyer is without a doubt your best option and one you should strongly consider.

Author Bio: American Tax Lawyer , Mr. Darrin Mish represents taxpayers all over the United States and on every inhabited continent. His many years of experience in dealing with tax problems benefits clients tremendously. He may be reached by calling toll free (888) 438-6474.

Category: Finances
Keywords: Tax debt, irs offers, irs debt