Taxpayers that are experiencing problems with tax debt can possible find a solution with a tax settlement program call an Offer in Compromise, if they qualify.
This program will allow taxpayers to settle their tax debt that is owed for a lesser amount.
Through an Offer in Compromise the IRS will agree to a specific dollar amount in exchange for clearing the back taxes owed.
Although this program is pretty well-known, some may realize there are several different ways in which it can be paid.
The two most common structures are the Short Term Periodic Offer and the Lump Sum Cash Offer.
More self-explanatory are the other names used for these payment structures; Short term Periodic Payment and Lump Sum.
Lump Sum is simply a payment made once of the whole offered amount.
Short Term Periodic Payment is offered into payments monthly, usually within a 24 month period.
Here is a little more detailed explanation of both structures.
Regarding the Lump Sum Offer, the IRS will allow the taxpayer to pay just a partial amount the of payment owed, usually 20%, when the Offer of Compromised is filed.
The balance would have to be paid within five months of the date accepted.
Also requiring a deposit when the Offer is filed, The Short Term Periodic Payment usually is the same as the monthly payment agreed upon.
If just one payment is missed, the IRS has the right to return your Tax Offer in Compromise and if you wanted to continue with this particular payment structure, you would have to start the whole process all over again and continue making the payments until the entire offered amount was paid in full.
Depending on your individual circumstances, you would have to decide which structure is most advantageous for you, as both of these payment structures have their advantages and disadvantages.
This program will allow taxpayers to settle their tax debt that is owed for a lesser amount.
Through an Offer in Compromise the IRS will agree to a specific dollar amount in exchange for clearing the back taxes owed.
Although this program is pretty well-known, some may realize there are several different ways in which it can be paid.
The two most common structures are the Short Term Periodic Offer and the Lump Sum Cash Offer.
More self-explanatory are the other names used for these payment structures; Short term Periodic Payment and Lump Sum.
Lump Sum is simply a payment made once of the whole offered amount.
Short Term Periodic Payment is offered into payments monthly, usually within a 24 month period.
Here is a little more detailed explanation of both structures.
Regarding the Lump Sum Offer, the IRS will allow the taxpayer to pay just a partial amount the of payment owed, usually 20%, when the Offer of Compromised is filed.
The balance would have to be paid within five months of the date accepted.
Also requiring a deposit when the Offer is filed, The Short Term Periodic Payment usually is the same as the monthly payment agreed upon.
If just one payment is missed, the IRS has the right to return your Tax Offer in Compromise and if you wanted to continue with this particular payment structure, you would have to start the whole process all over again and continue making the payments until the entire offered amount was paid in full.
Depending on your individual circumstances, you would have to decide which structure is most advantageous for you, as both of these payment structures have their advantages and disadvantages.
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