ive heard there is hardship form you can fill out to have your tax debt completely waived or signifigantly reduced if you dont have the assets or income to satisfy your irs obligation, is this true?
2007-10-25 07:09:59 · 11 answers · asked by need help! 1 in Business & Finance ➔ Taxes ➔ United States
Get into www.irs.gov
2007-10-25 07:11:59 · answer #1 · answered by Anonymous · 0⤊ 0⤋
I am an enrolled agent, licensed by the US Treasury Department who specializes in taxpayers who have large unpaid tax bills and prepare these for clients. If you want more information, you can send me email through my Answers profile.
If you can not pay in full now or ever, an Offer in Compromise is an option. It is a settlement with IRS where you pay less than 100 cents for every dollar you owe and IRS forgives the rest. It will do this if it determines you are offering as much or more as it could collect from you through monthly payments or seizing your property.
The amount you have to pay is, to use the IRS jargon, is "an amount that represents the reasonable collection potential of the account." This is a lump sum equal to what you could get from the equity in all your assets if they were sold at a quick sale, generally 80% plus 48 times what you could pay monthly on an installment agreement.
For example, if you had a car worth $10,000 and owed $5,000 on it and nothing else and IRS said you could make payments to IRS of $100 per month you would have to offer 80% of $10,000 minus the $5,000 owed = $3,000 PLUS 48 times $100 = $4,800 for a total of $7,800 on whatever you actually owed. You could make up to 24 monthly payments but would have to increase the 48 monthly payments to 60 for a total offer amount of $9,000 at $375 per month. How someone who could only pay $100 per month could be expected to pay $375 is a mystery.
I got an offer for a client who owed a quarter million dollar liability accepted at 1 cent on the dollar. Many other clients have not qualified at all. The average nationwide for accepted offers is about 17 cents on the dollar. Your own affairs may be more complicated, and it probably are if you add a home and a 401(k) plan and a car that will be paid off in just a few years, you would have to go through these gyrations with every asset. Your case might also dictate an entirely different approach including getting the whole account put on ice for a few years or filing for bankruptcy.
If you want to hire a professional representative--enrolled agent, CPA or attorney--stay away from the ones that advertise on cable TV. Their fees can be heart stopping. Mine are less than half of theirs. I don't know what other practititioners who post to this forum charge.
Other alternatives include showing that making any payments now would cause an undue hardship. If that is true, the account can be reported as currently not collectible and the account will be on ice until things improve but IRS will keep your refunds. If you can pay the liability within five years, you can get a payment agreement without any trouble.
2007-10-25 08:13:30 · answer #2 · answered by Anonymous · 1⤊ 0⤋
You may qualify for an "Offer In Compromise" where you pay less that what you owe.
It is not an easy process. The "form" is 64 pages long and the IRS says "NO" over 80% of the time.
Do not call one of the firms that advertise on TV or radio. Contact a CPA or EA in your area and explain your situation. Offer's In Compromise are generally only used if the balance owed is over $10,000. If you owe under $10,000, you should enter in to an installment agreement and stick to it.
In certain hardship circumstances, you may be able to get your account moved to "Currently Uncollectable" status. The IRS will cease collection efforts in the near term but, if you have money in the future, you would still be obligated to pay it.
2007-10-25 07:17:15 · answer #3 · answered by Wayne Z 7 · 1⤊ 0⤋
you can call 1-800-829-1040, or any phone number you were provided in any correspondence you may received from the IRS, complete form 433-F, Collection Information Statement, and have it ready when you call in. Or mail it to IRS with Form 9465, Installment Agreement Request, give your payment proposal and they will let you know if the proposal is accepted. The Form 433-F you must provide 3 months current bank statements, utilities bills, auto insurance payments, rent, etc, if you do not provide the information requested on the form it will be sent back to you for completion.
Good luck. Once you prove you can pay, you could be put on currently not collectible, and each year IRS will take your refund, or could garnish your wages, leaving you enough to pay rent.
2007-10-25 13:58:27 · answer #4 · answered by Ms. Angel.. 7 · 0⤊ 0⤋
living check to check isn't a hardship, its called life. if you owe taxes it meant you made money but spent it, thats also not a hard ship.
but by all means you can ask the irs to forgive the debt just by explaining your circumstances and seeing what they say.. if you dont get it fixed, you will not be able to collect social security and that woud be a hardship for someone that has no assets and savings and is to old to get a paycheck.. think about it..
2007-10-25 07:14:56 · answer #5 · answered by Anonymous · 0⤊ 0⤋
I don't think that's true, but sometimes you can get your tax obligation reduced. However, you probably do have assets, if you have a car, stereo system, computer....
I suggest you do everything you can to pay these back taxes because I have seen them come after someone who was making payments and wasn't able to pay it off. The IRS took their cars, house and everything in it to sell at auction. They are ruthless.....
2007-10-25 09:55:04 · answer #6 · answered by Gypsy Girl 7 · 0⤊ 0⤋
The IRS has absolutely no idea whatb the word "mercy" means. All they know is, you owe them they collect them.
I suuggest you call your county bar association and explain your problem.
They may be able to help you make a payment arrangement, but to get tax forgiveness- no, it won't happen.
2007-10-25 07:18:33 · answer #7 · answered by Barry auh2o 7 · 0⤊ 0⤋
I had the same problem last year.
I went down to my Income Tax office and showed them what I had and we discussed it right there.
If you try to get answers by telephone, you can be put on hold and hung up on if you are stressed.
You need to talk to someone face-to-face. Then they understand your problems and try to work with you and help you, right there and answer ALL of your questions?
If you want to get, what you want, discuss your problems in person.
2007-10-25 07:18:09 · answer #8 · answered by Cow Girl 2 3 · 0⤊ 0⤋
www.irs.gov.
Call them and throw yourself on the mercy of the court.
Stranger things have happened; but odds are they will want something. YOU HAD AN INCOME> should have accounted for taxes
2007-10-25 07:13:26 · answer #9 · answered by wizjp 7 · 1⤊ 0⤋
well,,,the IRS will compromise with you,,,,they will require financial info from you....call them...tell them you can't pay everything now,,,,or ever,,,,say you are willing to do the best you can....and yes,,,they will work with you,,,,you will have the usual hassles with any govt. agency,,,but it can work,,,,,just take the time....I have worked those deals for clients over the years many times...you can do it on your own...good luck
2007-10-25 07:17:17 · answer #10 · answered by jbatw8 1 · 0⤊ 0⤋
There's something called an offer in compromise that can be done. It doesn't necessarity get accepted though.
2007-10-25 07:22:01 · answer #11 · answered by Judy 7 · 0⤊ 0⤋