You've probably heard or seen commercials from companies advertising services to settle your tax debt for pennies on the dollar, and that all you have to do is give them a call. In reality, resolving your tax debt is not so easy. Many of these companies are "one-trick-ponies" that lack the experience and background to handle complications and other related issues. In many cases, these claims are often too good to be true.
Do you have questions about settling tax debt?
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Like all creditors, the IRS knows that not all debts will be paid. Rather than collecting no money at all, the IRS may choose to accept less money – but only in certain circumstances. If you have tax debt, you may be able to have the IRS accept less than the full amount you owe by getting an Offer in Compromise (OIC). The IRS will only accept an Offer in Compromise if you meet certain requirements and if the amount offered is the most the IRS can expect to collect based on your financial situation. The IRS has strict requirements for acceptable offers, and many are not accepted.
Bankruptcy is another option for settling tax debts. Chapter 7 bankruptcy is the most common way to discharge tax debt and you must meet certain requirements.
- Income taxes are the only tax debt that can be discharged.
- The tax debt must be at least three years old.
- You must have filed a tax return for the debt at least two years before filing bankruptcy.
- The IRS must assess the tax debt at least 240 days before you file bankruptcy.
- You did not commit fraud or tax evasion.
Have questions? Call an Arizona bankruptcy attorney today!
Tax debt is a common problem for people from all walks of life. Although everyone's situation is unique, the underlying problem is generally the same: you're simply not able to pay the IRS. At the Neeley Law Firm, an Arizona bankruptcy lawyer can work personally with you to help you understand your options for settling or discharging your tax debt and how we can walk you through the process.
To learn more about resolving your tax debt, call 480-267-9046 or book an appointment online.