by Irs Tax Settlement

Created on: July 19, 2010   Last Updated: July 20, 2010

If you Owe the IRS and are honestly not able to pay the tax debt, penalties, and interest, you may qualify for a Tax Debt Settlement agreement with the IRS known as an Offer in Compromise. An Offer in Compromise is essentially a Tax Debt Settlement agreement in which the IRS settles your Tax Debt for less than what you actually Owe the IRS. To do so, you must agree to full financial disclosure. The IRS will then compare your Tax Debt Settlement offer to what they figure you are actually able to pay.

How to Apply for an Offer in Compromise Tax Debt Settlement Agreement
To apply for an Offer in Compromise Tax Debt Settlement Agreement on what you Owe the IRS, you will need to submit Form 656 (Offer in Compromise) along with Form 433-A (Collection Information Statement) and your calculation of the amount of the Tax Debt Settlement you are offering to the IRS.

As mentioned above, you must agree to full financial disclosure when applying for an Offer in Compromise Tax Debt Settlement on what you Owe the IRS. The IRS will take into account your total household income, total household expenses, and net equity. They will then compare their calculation of what you are able to afford as far as a Tax Debt Settlement for what you Owe the IRS and the amount you are offering to pay.

My Offer in Compromise Tax Debt Settlement Has Been Approved. Now What?
Should the IRS accept your Offer in Compromise, you must agree to pay the offer amount that was agreed upon, file your tax returns on time, as well as pay what you Owe the IRS on time for the following five years. Should you not fulfill these requirements, as well as any other requirements agreed upon in your Tax Debt Settlement, the IRS can and will revoke your Offer in Compromise and make you responsible for the full amount you Owe the IRS.

Beware of Offer in Compromise Tax Debt Settlement Scams
If you qualify for an Offer in Compromise on what you Owe the IRS, it can be the perfect Tax Debt Settlement agreement if only because it can potentially reduce what you Owe the IRS by tens or hundreds of thousands of dollars. You must, however, be wary of companies and individuals that are offering to take care of what you Owe the IRS for mere "pennies on the dollar." This is because everyone would like to pay less than what they Owe the IRS, but not everyone qualifies for an Offer in Compromise.

Basically, an individual will only qualify for an Offer in Compromise on what they Owe the IRS if they are absolutely flat broke. You'll

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