Options You Can Use to Settle Your Tax Debt Part 2
In Part 2, we will be continuing our discussion of what options are available to you to settle your tax debt.
In Part 1 we discussed Installment Agreements. In this video, we will talk about Offers in Compromise, also known as OIC's. If you have a financial situation that provides you with little disposable income, and your situation is unlikely to change in the near future, you may be able to submit an OIC. For example, a retired person with a fixed income, few assets, and reasonable living expenses who is unable to pay off their tax debt can argue that their financial situation is not going to change, so the IRS should agree to compromise the debt. The general rule is that if you can't pay off your taxes within the remaining life of the statute of limitations, you will be eligible for an OIC.
When the taxpayer is eligible and this strategy is used correctly, it can wipe away hundreds of thousands of dollars in tax debt. Just the other day the IRS agreed to reduce one of our client's tax debts by over $900,000. Although he had initially owed over a million dollars, the IRS settled for approximately $200,000!
Check out Part 3 to find out more information about a third option to settle your tax debt.