Find Out If You Qualify for IRS Tax Debt Resolution Services

Find Out If You Qualify for IRS Tax Debt Resolution Services

• May 01, 2022

When you have a large tax debt, you can feel like you don’t have any options for getting out from under it. The truth is, there are programs out there that can help, but many people assume that they won’t qualify, so they simply don’t pursue the options available to them. If you’re in debt to the IRS, it’s important to learn the qualification requirements for tax debt relief programs; you might be surprised to learn that you can, in fact, qualify for many of these repayment options. Here’s what you need to know.

Your Tax Balance

One of the first factors that the IRS will look at is your total tax balance. Typically, they are most willing to work with taxpayers who have under $50,000 in unpaid tax debt. The majority of people with personal tax debt are well below this threshold; more often than not, tax debts over this threshold are held by corporations, which have different tax relief options.

Your Total Income

Most tax debt relief options are designed to help low-income individuals who cannot afford to pay their taxes via traditional means. To qualify for a tax relief program, you should make under $100,000 as a single filer, or under $200,000 if you and your spouse file jointly. If you make more than this amount, some other debt mitigation options may be available to you, but you will be excluded from most debt forgiveness options.

Your Other Assets

Your actual income is far from the only financial factor that the IRS will examine when determining if you qualify for a debt settlement or repayment program. They will also look at your other assets, such as property, valuable items, vehicles, and so on. If you have excessive assets that could reasonably be liquidated to settle your debt, you’re not likely to qualify for tax debt settlement.

Your Financial Hardship

If you’ve recently experienced a demonstrable financial hardship that impacted your ability to pay, the IRS will likely work with you to settle your debt. For example, self-employed individuals who have experienced a drop in net income of 25% or more are often afforded some options for taking care of what they owe. Other hardships impacting your finances, such as medical bills, divorce, death of a spouse, and so on, may also be considered extenuating circumstances that can allow you to qualify for a debt settlement program.

Your Settlement Offer

While the three factors above will impact your ability to qualify for many IRS programs, it’s important to be aware that every program has its own qualifications and requirements. For example, most people will be approved for a short-term repayment plan. Long-term repayment plans are also fairly common. However, offers in compromise are notoriously difficult to receive. This latter option is handle very differently from repayment plans, so their qualification requirements are quite different—primarily, the offer that you provide the IRS.

An offer in compromise requires you to submit an offer to the IRS for whatever amount you believe yourself capable of paying. The IRS will then examine all of your finances, including the factors mentioned above, and decide for themselves whether or not they believe your offer is the most they can reasonably expect to collect on your tax debt. If they don’t believe that you’ll be able to pay more than what you’ve offered, your offer in compromise will be accepted.

Your Advocate for Tax Debts

Ultimately, understanding the requirements for various tax debt settlement programs and effectively negotiating them is quite difficult. The best way to learn if you qualify for IRS tax debt resolution services is to work with a tax professional. At the IRS Advocates, we specialize in helping taxpayers get their IRS tax debt problems under control, so you can free yourself of the burden of tax debt.

To find out if you qualify, visit our home page and take a moment to answer a few questions. Then, we’ll provide you with information regarding the programs you may qualify for, and help guide you through the process of applying for the tax debt relief programs that best suit your needs. Take the first step, and find out if you qualify today!