IRS Debt Forgiveness
  • January 13, 2017
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What Is IRS Debt Forgiveness?

There are times when defaulting taxpayers genuinely want to pay their debt, but are unable to because of an ongoing financial crisis. The IRS recognizes such scenarios, and therefore, has several debt relief and debt forgiveness provisions to help well-intentioned taxpayers avoid any financial hardship that may arise if they are forced to pay more than what they can afford. In this blog post, we take a look at provisions that the IRS offers to taxpayers. Let’s begin.

Offer in Compromise (OIC)

Taxpayers may request the IRS to reduce their existing tax liability in a case they are not in a position to meet their tax obligations. Offer in Compromise, also called IRS debt settlement, provides taxpayers with a fresh start to help them comply with future tax obligations, without being pulled down by their current liabilities. The provision, however, is available only to those taxpayers who meet the required criteria.

IRS Tax Installment Agreement

The IRS tax installment agreement, also called IRS debt consolidation, does not offer taxpayers any deduction on outstanding liabilities. Rather, it allows taxpayers to clear their outstanding dues in equated monthly installments. The IRS takes into all outstanding taxes to consolidate the debt, based on which it decides a payment plan. If the taxpayer agrees to pay regularly, the IRS ceases all its collection efforts such as levies, liens, and wage garnishments.

Innocent Spouse Tax Relief

When married couples file a joint tax return to benefit from their ‘married filing jointly’ status, the liability of the taxes lies with both spouses. Sometimes, one of the spouses may request the IRS for a tax relief, citing the reason, which can be lack of awareness of underpayment or understatement of taxes. The justifications they might give include signature forgery by the other spouse, domestic abuse, and lack of access to financial information.

Currently Non Collectible Status

Under this provision, although the IRS does not exempt the taxpayer from paying taxes, it temporarily pauses all collection activities. The accounts of taxpayers that qualify under this provision are flagged as Currently Non Collectible (or CNC). The IRS may also place an account in CNC status if it is unable to track the taxpayer, the statutory period for collection has expired, or the taxpayer has passed away and the tax cannot be collected from their descendants.

Wrapping Up

The provisions we have discussed are some of the preferred way outs to receive IRS tax forgiveness or debt relief. There are various other tax relief options available, but chances are, you may not know about all of them. If you are seeking IRS debt forgiveness, the experts at The Law Offices of Nick Nemeth can help. Schedule a free consultation with Nick Nemeth personally  to learn more about the possibilities to get rid of an IRS tax debt. Simply call (972) 426-2553 or fill out our contact form and we will be happy to schedule you a free no-obligation consultation either at the office or a phone consult.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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