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THE IRS MAY AGREE TO SETTLE FOR LESS:
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The
IRS has the authority tocompromise a tax liability owed based
on doubt as to "collectibility", " liability",
or "efficient administration of the tax." |
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CAN
THE IRS COLLECT ALL OF THE TAX YOU OWE THE TREASURY?:
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"Collectibility"
is defined by the amount the IRS can collect from you. The IRS
generally has 10 years to collect a tax that has been assessed
against you. There are restrictions on the amount of your income
the IRS can take. If the IRS can settle the tax for a payment
equal or greater than they could reasonably expect to collect,
they will often accept such a settlement. |
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DO
YOU REALLY OWE ALL OF THE TAX
CLAIMED BY THE IRS?:
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If
there is a genuine doubt as to your liability for the tax or
the amount you actually owe, you may offer to "split the
difference" or compromise the amount due. The IRS will
weigh the chances of winning in court and may accept an offer
of less than the full amount they claim is due. |
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EFFICIENT
ADMINISTRATION OF THE TAX:
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In some
situations, the IRS will consider special circumstances of the
taxpayer. For example, the IRS does not like to force the sale
of a home when the taxpayer is ill or widowed and supporting
small children. This option is limited but helpful when some
payment is possible but the situation is grave. |
THE
IRS CAN SUSPEND COLLECTION:
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While
the IRS is not required to stop enforced collection when an
offer is submitted, if the offer is reasonable, they can defer
collection to review the offer and suspend collection if continued
collection will be a financial hardship. |
IRS SETTLEMENT PROCEDURE:
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If you
make an offer to the IRS, you are required to submit detailed
financial statements and supporting information to document
your financial circumstances. Or, if you dispute the amount
or nature of your tax liability, you must satisfactorily prove
your position with the IRS.
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