Little Known IRS Tax Debt Options Worth Exploring
When most people think about resolving IRS tax debt, they have heard of the usual suspects: the Installment Agreement, the Offer in Compromise,Currently Not Collectible status and bankruptcy.
But what happens when those options do not fit or when the real solution lies off the beaten path? The IRS has a more nuanced toolbox than most taxpayers realize.
Below are lesser-known IRS tax relief strategies that might help resolve a debt-especially for taxpayers with unique financial, legal, or procedural circumstances:
· . Partial Pay Installment Agreement (PPIA) Often mistaken as a standard monthly payment plan, a Partial Pay Installment Agreement allows you to pay what you can afford monthly. The IRS writes off the remaining balance once the statute of limitations (10 years from assessment) expires.
This is a legal form of partial forgiveness that does not require you to qualify for an Offer in Compromise. IRS Equity Analysis on Assets
The IRS often uses quick-sale value or actual equity instead of market value when evaluating assets. This approach can significantly reduce what the IRS deems collectible, affecting your payment or settlement terms-especially useful when dealing with home equity or retirement accounts.
· Audit Reconsideration as a Debt Strategy If your debt stems from an audit you never responded to, you may be eligible for audit reconsideration. Providing documentation that was previously missing can lead to a reversal of the tax assessment and reduction of your tax debt.
· Penalty Recalculation via First-Time Abatement or Reasonable Cause Besides the well-known First-Time Abatement, the IRS also allows Reasonable Cause relief for extraordinary circumstances like illness or natural disasters. Used strategically, these abatements can eliminate thousands of dollars in penalties.
· Doubt as to Liability Offer in Compromise (OIC-DATL) Beyond the Basics: Little-Known IRS Tax Debt Relief Options Worth Exploring This lesser-known offer type is available if the IRS may have incorrectly assessed the tax. No financial hardship needs to be shown. It applies in cases of identity errors, calculation mistakes, or misapplied income.
· Innocent Spouse Relief - The Equitable Version Equitable relief under IRC § 6015(f) can release a spouse from joint tax liability when it would be unfair to hold them responsible-commonly in cases of deception, abuse, or financial control.
· Collection Appeals Program (CAP) & CDP Hearings Before the IRS takes collection action, you may appeal through a CDP hearing or CAP. These processes stop levies and provide a forum to raise issues such as incorrect tax balances or propose alternative resolutions. IRS tax debt resolution is not one-size-fits-all.
· Lien Processes and Procedures: Lien Discharge, Subordination, Withdrawal, Non-attachment, Release. These types of procedures may allow for refinancing for equity in assets to be withdrawn from property and applied to tax debt. Or, for people with similar names that are not taxpayers to get the lien off their credit report and be able to secure loans. Withdrawal of liens when a lien was prematurely filed or with a DDIA payment plan. And more.
While Offers in Compromise and payment plans get the headlines, these lesser-known tools can be the key to real relief-especially when traditional options fall short.
As IRS enforcement grows, understanding your full range of options is more important than ever. The IRS may be understaffed.
However, the computer system is automatic and is issuing notices, liens, and levies for non-compliant taxpayers. In addition, requesting that passports be denied or cancelled for taxpayers who have debts over $50,000.00.
Do you know that there are over fifty IRS tax processes and procedures for collection in the Internal Revenue Code and Internal Revenue Manual that taxpayers can seek according to their tax issues?
If you need assistance call Martha De la chaussee at 323-344-2294, Luz Orozco EA at 310-650-4664 or Hassan Dornayi EA at 626 337-4664. We are a team of tax representatives who know how to resolve all types of tax audits and debts.
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