Author Box
Articles Categories
All Categories
Articles Resources

State Agency Tax Settlement Principles

May 21, 2012 | Comments: 0 | Views: 142

A tax settlement is an agreement where a taxpayer and the IRS come into agreement to settle the tax liability through one of the IRS or state programs. Each state varies on what type of tax settlement program they offer and the guidelines in submitting them. Most states' guidelines for a tax settlements are very strict.

Basically these fall into 2 general categories:

1.The first is when the taxpayer may qualify to pay back less than the full amount owed and is unable to pay the full debt back immediately. This includes abatement of penalties, an offer in compromise or a partial payment plan.

2.There are two additional options if the individual doesn't qualify for a settlement. One is a monthly payment plan, known as an installment agreement, is set up to pay back the tax debt over time. The other is usually due to an extenuating circumstance where the taxpayer cannot pay anything. this is called uncollectible status. It could be family, a medical condition or unemployment. Until the individual's financial situation changes, the IRS or state will hold off collections temporarily.This does not stop the interest from accruing or eliminate the debt.

Generally the state tax debt is less when an individual owes both the state and IRS. An installment agreement will need to be set up with the state majority of the time.

However, there are taxpayers who cannot pay the state back in an installment and are looking for tax relief, typically in a tax settlement where less than the full amount of the tax liability is paid back. An Offer in Compromise is the typical way this is done.

An Offer in Compromise is an agreement between the IRS or state agency where the taxpayer pays less than the full amount of the tax liability.

The Offer in Compromise/tax settlement program is available in most states. When submitting an Offer in Compromise, most state agencies will require full financial disclosure and documentation.

There are many variables that a state agency will consider when deciding on accepting a settlement. The individual's income, expenses, and assets are typically included in these. Other factors include, age, medical condition and circumstances that created the tax debt.

State tax departments will exam what could be collected in the future given the taxpayers age, employment status, medical condition and any other extenuating circumstances as well as looking at the taxpayer's current financial state.

A tax settlement with state agencies can usually take anywhere from a few months to over a year. It is important that the correct forms are filed and that the right substantiating information is submitted to avoid have the Offer returned.

An experienced tax representative should be able to help with evaluating whether a taxpayer would actually qualify for an IRS tax settlement or state tax settlement. They will make sure that the lowest possible amount is offered and that correct forms and documentation are submitted.

Cynthia Kuhne has been helping people resolve their tax problems successfully for over 16 years. She is a licensed Enrolled Agent with both the knowledge and experience to handle the toughest IRS tax settlement cases. She is the founder and president of CKTax Inc., a full service IRS tax settlement company with an "A+" BBB record. If you have a tough tax problem, visit or call 888-894-2005.

Source: EzineArticles
Was this Helpful ?

Rate this Article

Article Tags:

Tax Settlement


Irs Tax Settlement

The 3 Month Payday Loans is most suitable options for the people who do not possess assets. There are a variety of loan options for the people who are willing to pledge assets against the cash

By: Cameron white l Finance > Personal Finance l July 09, 2013 lViews: 560

For many people, bankruptcy can make their world fall apart. The apparent loss of reputation coupled with the inability to take financial decisions can deter anyone from thinking clearly. But all is

By: noragwilt l Finance > Bankruptcy Lawyers l November 18, 2012 lViews: 304

If you are availing payday loans with monthly payments, it is easy for you to obtain quick money from online lending companies.By getting the best deals of loan, you can save money in terms of

By: Malen Cheks l Finance > Loans l November 16, 2012 lViews: 289

Loans online have become the popular source of income and people can make smart decision of taking it.Now, don’t go anywhere and sit in your home silently. Such deals would bring you money without

By: Marsh Jone l Finance > Loans l November 13, 2012 lViews: 288

Loans for the unemployed would let you feel comfortable with your unstable conditions due to jobless period.If you compare the rates of a few lenders, you would definitely get the suitable lender to

By: kelse roy l Finance > Loans l November 13, 2012 lViews: 467

By taking cash advance for bad credit, it is easy for you to improve your credit status. This loan is useful to relieve financial stress. This loan is totally free from credit verification and

By: Honard Nork l Finance > Loans l November 09, 2012 lViews: 301

Tax attorneys, CPAs, and enrolled agents are all qualified to file tax returns and provide assistance with tax resolution. So how can you choose the tax pro who's right for you?

By: Oswald Hermitl Finance > Taxes Reliefl July 03, 2012 lViews: 196

Tax attorneys and certified public accountants are both equipped to help you with complicated tax matters, but the two jobs aren't interchangeable. Learn the difference to hire the right tax

By: Kelly R Robertsonl Finance > Taxes Reliefl July 02, 2012 lViews: 140

Truckers nowadays have a lot more to worry about than heavy traffic and the high cost of fuel. Whether you're an owner operator, an independent contractor, or a commercial company driver, you should

By: Maria Allenl Finance > Taxes Reliefl June 28, 2012 lViews: 145

Owing back taxes to the state or federal tax authority is a hassle in and of itself. However, when you add heavy late fees and other tax penalties into the mix, you can be left an even bigger mess

By: Kelly R Robertsonl Finance > Taxes Reliefl June 26, 2012 lViews: 148

If you need tax help, there are several different routes you can take. One way is to tackle the problem yourself, which might save you a few dollars in the short term. In the long term, however,

By: Mark R Randalll Finance > Taxes Reliefl June 22, 2012 lViews: 194

The Disability Tax Credit may be one of the best ways to get income tax money back from the government - and it is also one of the least aptly named of the tax credits available in Canada. While most

By: Colleen A Hughesl Finance > Taxes Reliefl May 30, 2012 lViews: 169

Many individuals owe back taxes to the IRS that they are unable to pay. Thousands have had IRS levies put on their wages, bank accounts or are receiving frightening letters. They live in fear of the

By: Cynthia Kuhnel Finance > Taxesl April 09, 2012 lViews: 159

Quick Answer: Yes. But first let's learn a little more about the IRS levy: An IRS levy is an authorized seizure of property to satisfy a tax debt. When are IRS levies sent?

By: Cynthia Kuhnel Finance > Taxes Reliefl February 21, 2012 lViews: 145

So you have acquired either a "Notice of Intent to Levy" or maybe an actual levy has been delivered to your bank, company or placed on another source of income. A "Notice of Intent to Levy" is a 30

By: Cynthia Kuhnel Finance > Taxes Reliefl February 12, 2012 lViews: 120

Discuss this Article

comments powered by Disqus