IRS Back Tax Settlement Cases

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The following are examples of real IRS back tax settlement cases resolved by ALG Tax Solutions. We changed the names and locations to protect the confidentiality of our clients.

Settling your IRS back taxes for less than you owe can happen. It is based on numbers. You will get a tax settlement if your financial condition supports it.

All three of these cases took about 6 months to complete. Once the client pays the agreed upon IRS back tax settlement, it is done. The IRS will remove the rest of the taxes and all tax liens. If you qualify, negotiating an IRS back tax settlement is a good strategy.

IRS Back Tax Settlement – Case 1

The client is self-employed and did not file IRS tax returns for 4 years. The client now owes about $35,000 in back taxes and is ready to face the tax problem.
  1. We filed the client's missing tax returns and also calculated estimated payments for the current tax year, which the client paid.
  2. We determined that the client qualified for Offer in Compromise Doubt as to Collectability, so we began collecting information from the client to prepare the Offer in Compromise
  3. We offered the value of the client’s vehicle, which was $3,000, to settle the IRS back taxes. This Offer was filed via certified mail.
  4. After some negotiation, the IRS accepted the Offer in Compromise for $3,000
  5. We provided the client with detailed instructions for completing the $3,000 IRS back tax settlement.
The IRS accepted $3,000 for $35,000 of IRS back taxes. The client was ecstatic and could not believe it. This was possible because the client qualified for an Offer in Compromise and the information we provided to the IRS supported the $3,000 IRS back tax settlement.

IRS Back Tax Settlement – Case 2

The client lost a lucrative business a few years ago and has since been working in low-paying jobs. The client received a $70,000 IRS back tax bill. The client knew there were some unfiled returns, but not much else.
  1. We gathered all the IRS tax records and determined which returns were missing.
  2. We determined that the client's case had been assigned to an IRS Revenue Officer, so we called the Officer to request time to prepare all missing returns.
  3. We filed missing tax returns.
  4. We determined the client qualified for Offer in Compromise Doubt as to Collectability, so we collected information from the client to prepare the Offer in Compromise.
  5. We offered $750 to settle the IRS back taxes. This offer was filed via certified mail.
  6. After some negotiation, the IRS accepted Offer in Compromise for $750
  7. We provided client detailed instructions for completing the $750 IRS back tax settlement.
The IRS accepted $750 for $70,000 of IRS back taxes. The client was relieved. The client had been struggling financially over the years, and this was a stepping stone to getting the client’s life back together.

IRS Back Tax Settlement – Case 3

The client used to be self-employed and had not filed any returns. The IRS filed missing returns for the client. As a result, the client owed about $35,000 of IRS back taxes. The client was living out of a van on his parent’s driveway.
  1. We decided not to file the missing tax returns because the client did not keep business records.
  2. We determined that the client qualified for Offer in Compromise Doubt as to Collectability, so we collected information from the client to prepare the Offer in Compromise.
  3. We offered $500 to settle the IRS back taxes. This Offer was filed via certified mail
  4. We negotiated with the IRS and provided additional documentation to support the client’s financial situation, after which the IRS accepted the Offer in Compromise for $500
  5. We provided the client with detailed instructions for completing the $500 IRS back tax settlement.
 
The IRS accepted $500 for $35,000 of IRS back taxes. This was possible because the client's financial situation supported the $500 Offer. In this specific case, it would not have mattered how much the original tax debt was. As with the previous cases, this client was extremely relieved that we were able to negotiate with the IRS for a much smaller settlement.