Common Scenarios In Which You May Be Able To Lower Your Tax Debt

Tax Settlement | US Individual Tax Income Return Form With Red Pencil On Top A tax settlement can provide significant relief for Americans who owe back taxes to the IRS but are unable to pay off that debt.

As the IRS becomes more aggressive in its efforts to collect unpaid back taxes, many Americans are forced into increasingly tough financial situations.

When your tax debt continues to go unpaid, the IRS has a right to:

  • Deduct money from your hard-earned work paychecks – up to 80% of your wages – until your tax debt is paid off.
  • Hit you with stiff fees, penalties, fines and compounding interest on your tax debt, which can significantly increase the amount you owe, month after month.
  • File a federal lien against your property, which will appear on your credit report and make it almost impossible for you to obtain credit or financing of any kind until the lien is lifted.
  • Take money from your bank accounts, including checking, savings or even your retirement accounts.
  • Seize and sell your property or other assets

The unfortunate part of this process is that these aggressive actions will make it even more difficult for you to pay off your debt. Not only that, if your accounts are being levied, it will leave little for you and your family to live on.

However, there are many scenarios in which a settlement of your tax debt may be possible. By working with a professional tax settlement attorney, you may be able to settle your debt for less than the full amount owed.

Depending on your unique situation, this arrangement could potentially save you thousands of dollars and enable you to get back on your feet.


Tax Settlement Scenarios

Tax Settlement | IRS Form Next To Receipts Below, we list some of the most common scenarios in which tax settlement is possible. But if you don’t see your exact situation listed, don’t panic.

Keep in mind that, regardless of your specific circumstances, if you have significant tax debt, there may be a tax relief solution that can help you.

1) You can’t afford to pay your full tax debt. If you are simply unable to pay the full amount of your back taxes, then your tax attorney will help form a special agreement between you and the IRS, called an Offer in Compromise.

This agreement settles your tax debt for less than the full amount owed, and is essentially a leniency program for those who have exhausted all other means of paying down their debt in full.

2) Penalties have made it even harder for you to pay your back taxes. Penalties and interest can turn a small tax debt into an unmanageable amount in a short period of time. In fact, they can make up 1/4 of the amount you owe. But by working with tax attorneys who are experts at penalty abatement, you may be able to have those penalties reduced or completely removed.

To qualify for penalty abatement, your attorney will prove that your situation meets one of three basic requirements: an IRA mistake, administrative waivers, or reasonable cause, which would be a situation beyond your control that hindered your ability to pay on time, such as:

  • Major illness
  • Family death
  • Missing records due to destruction or death
  • Natural disaster, such as flooding, hurricane, earthquake, etc.
  • Lengthy unemployment
  • Major life disruption, such as divorce

3) The IRS is threatening a lien, levy, seizure or wage garnishment. If you have received a notice from the IRS threatening any of its aggressive collection actions, then now is the time to act. With the help of a qualified tax attorney, you can file an appeal to stop an IRS lien or levy, and take the necessary steps to settling your debt.

It’s critical that you do not delay this step. Your attorney will likely follow one of two procedures: Collection Due Process or Collection Appeals Program – both of which give you the right to a hearing, but only if your request is made in a timely manner.

4) Your spouse or ex-spouse is responsible for your tax debt. When you file a joint return with your spouse, you are both held equally responsible for your tax return. However, if you can show that tax debt was the result of actions by your spouse, which were beyond your control and knowledge, you may be able to have your tax debt and penalties relieved.


Take The First Step Toward Tax Settlement

Every person’s situation is different, which is why it’s crucial to speak to a professional tax consultant.

The tax settlement experts at US Tax Shield can help you seek the relief you deserve. Rated A+ by the Better Business Bureau, US Tax Shield specializes in all forms of IRS issues and we will help you find the right solutions for your situation.

Our skilled tax attorneys will work to get the IRS off your back, protect your assets, and potentially get you a tax settlement that could save you thousands.

Contact us today at 877-829-3535 for a FREE, NO OBLIGATION 15-minute consultation with a tax settlement expert.