A Guide To Tax Debt Settlement

A Guide To Tax Debt Settlement

Are you looking for a clear and concise guide to tax debt settlement? Have you been wondering what makes a good offer and how to understand whether a compromise is a good option when it comes to tax debt settlement? If so, allow us to provide you with simple and easy-to-understand answers to your questions.

How To Understand Which Debt Strategy Is Right For You

Debt Strategy


A number of debt strategies exist when it comes to tax debt settlement and knowing which one is right can be the challenge. Often, it is good for a financial professional to prepare a financial statement for the clients which takes into account their unique financial situation. In reality, the right debt strategy is strongly dependant on the unique factors related to the individual’s financial services situation.

A debt strategy that is right for the person is one where they have the ability to pay off the debt. However, where there is a clear issue as to how a person will be able to clear a debt, a compromise could be a better route to follow.

What Determines Whether a Compromise Is A Successful Option?

Compromise Is A Successful Option

A compromise may be an option for tax debt settlement. For this to be considered the individual needs to be in compliance with the law. As well as this they need to be in a position where they are able to pay something and to borrow something. Reasonable collection potential is the mechanism used to determine the ability to pay and to borrow in these circumstances.

Are Partial Payment Installation Agreements An Option In Tax Debt Settlement?

Partial Payment Installation

This process involves a taxpayer making a payment every month but the overall amount paid is less than the full amount which is due. Such partial payment installations can be easier to get than the above-described compromise, however, they tend to be reviewed every couple of years and the terms can be adjusted accordingly.

Is It Better To Make A Lump Sum Payment Or To Make Monthly Installments?

Lump Sum Payment

When considering the best option for a tax debt settlement it can be hard to decide between the above two options. As a rule, it can be a good idea to first make a cash offer which will be paid within 90 days. This type of cash offer trend to get the attention of the IRS and means it may be processed within a quicker timeframe. It also offers a measure of reassurance that the taxpayer will go ahead with the payment,

The Bottom Line On Tax Debt Settlement

Tax Debt Settlement

Indeed, the world of tax debt settlement can be quite a complex one with various options available to people who find themselves in such a situation. However, with several options which may be available, it can be more than possible to find a solution that works. By asking a financial professional to prepare a financial summary of your situation and to use this to consider the options available you are well on your way to getting your financial circumstances back on track.

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