The IRS doesn’t offer an explicit taxes owed forgiveness program nor is there an IRS liability forgiveness form. Despite common misinformation, there is no “IRS one-time forgiveness” for taxes owed either.
The confusion stems from the two tools the IRS does offer: a form called a “cancellation of liability” form, or Form 1099-C, and a first-time penalty waiver for people who miss certain deadlines.
However, the IRS does offer several options to help people manage their tax liabilities, and there still might be potential for taxes owed forgiveness depending on the individual circumstances.
Even though taxes owed forgiveness isn’t an option for everyone, there are multiple opportunities for people wondering how to get out of taxes owed.
The IRS offers a short-term payment plan and a long-term installment agreement. Each option has different stipulations and costs, so it’s important to review the options before applying. The general standards for each payment plan are:
There might be other stipulations depending on the unique tax situation. There are tax professionals that can offer guidance in the right direction.
An “offer in compromise” is the closest IRS option to liability forgiveness. However, it does require a fair bit of research to craft an offer that the IRS will accept. There are some general guidelines to an OIC, which include:
The IRS doesn’t give a specific amount they expect to collect from each offer in compromise, but they do accept offers that represent what they think they can collect in a reasonable amount of time.
Managing taxes owed can be complicated when individuals need to negotiate an offer in compromise or installment agreement. Tax liability relief programs are an option for people with significant taxes owed. They can offer strategic guidance because of their:
While it’s true that some tax relief programs can be scams, there are legitimate solutions that can help negotiate the complex world of taxes.
Tax liability forgiveness is an effective way to manage accumulated liability, but taxes never go away. That’s why it’s important to create a strategy for reducing future tax liabilities, which should help anyone avoid a massive tax bill.
Two of the most commons ways to reduce or eliminate taxes owed are:
There are other opportunities to manage taxes owed, but they do require some strategic work and potentially help from a tax planning professional or investment advisor.
Even armed with this guide, it can be daunting to see out taxes owed relief help. However, the right team can guide someone through the tedious process of seeking taxes owed forgiveness while securing the best offer possible.
For help with IRS and state taxes owed over $10,000, call 1-800-928-5035 for a free consultation.
This post was published on July 22, 2020