How to Negotiate Taxes With the IRS

Tax negotiation is not for everyone; the IRS is extremely selective on whose debt they will negotiate. A taxpayer must meet specific requirements in order to be considered a candidate for tax negotiation. To start, it is important to first look at your situation and to see if it meets what the IRS requires in order to consider a settlement. Below are the 2 situations where a taxpayer is able to negotiate the taxes owed and the settlement methods which are commonly used for those situations.

Poor Financial Situation

When the IRS believes they will not be able to collect the taxes owed through any form payment method or forced collection method, they may consider that taxpayer for a settlement if the taxpayer proves their situation to the IRS. There are 2 common methods for negotiating taxes if a taxpayer has a poor financial situation. They are Offer in Compromises and Partial Payment Installment Agreements

Offer in Compromise

An Offer in Compromise is a filing that allows the taxpayer to make an offer to the IRS for an amount equal to or greater than the amount the IRS would ever expect to collect from the taxpayer. The offer amount is typically a fraction of the total amount owed. It is a tedious filing that is rarely accepted by the IRS, but people who truly cannot pay have a strong probability of being accepted.

Partial Payment Installment Agreement

This method allows the taxpayer to pay back the taxes owed over a given period of time in monthly installments. The total amount they pay is normally less than the total amount of tax owed. In order to qualify, the taxpayer must not be able to make the required monthly payments of a normal installment agreement.

Valid Excuse for Not Filing or Paying On Time

Typically when people owe a lot to the IRS their penalties and interest make up for a large portion of the amount owed. The IRS imposes these penalties as a scare tactic to make the taxpayer pay sooner. The IRS does realize that there are times where a taxpayer does have a legitimate excuse for not paying or filing their taxes on time, and they will forgive the penalties. If this is the case for the taxpayer, they may file for Penalty Abatement with the IRS to have the penalties removed.

If You Qualify

If the taxpayer believes they fall into one of these categories it is important to thoroughly research the filing required with the settlement method. Some of these filings are very tedious and difficult. The main reason for denial is simply because of errors in the filings. It his highly suggested to hire a tax resolution expert when attempting to make of these filings.

If You Don't Qualify

If the taxpayer does not fall into either of these categories it is likely that they will not be able negotiate their taxes. The preferred method by the IRS for a taxpayer to pay the taxes is through an installment agreement. Installment agreements allow the taxpayer to pay in monthly increments and will be considered to be in good standing with the IRS as long as payments remain on time and in full.

There are many other options available for resolving problems with the IRS. It is suggested that you speak with a tax professional about the different back tax settlement options. A tax professional will be able to guide you on finding the best settlement method for your financial situation. Visit for more information.