The bad news is that many people are plagued with IRS tax problems, but the good news is that problems with income taxes are also accompanied by a variety of solutions that can be customized for any citizen. While income tax problems and solutions are unique to every situation, there are set categories for solving these issues. They include Installment Agreements (IA, PPIA, SIA, Conditional Expense IA, and Stair Step IA), Offers in Compromise (OIC), Currently Non Collectible (CNC), and Penalty Abatement (PA). The various solutions to your IRS tax problems may seem more daunting than the problem itself, as they all have different standards and different methods of implementation.
The most common program used to solve IRS tax problems are the installment agreements, which have five different varieties. A generic installment agreement is simply a plan to pay a certain amount to the IRS each month until the debt is paid off; partial pay installment agreements only last for the duration of the statute, may not cover the whole amount, and depend upon full financial disclosure from the debtor. A streamline installment agreement requires the the assessed balance of the debt is less than twenty five thousand, and it doesn’t require full financial disclosure if the debtor can pay it within sixty months. A conditional expense installment agreement requires the debtor to pay the full amount in sixty months, allowing them to continue with payments for other monthly bills. The last variety of installment agreement is called a “stair step” because the monthly payment increases after the first twelve months of payment so that the debtor can pay the full amount within five years.
Other solutions to IRS tax problems are Offers in Compromise (OIC), Currently Non Collectible (CNC), and Penalty Abatements (PA). OIC is the payment of whatever a debtor can manage in five to twenty four months and the discharge of the balance; CNC requires full financial disclosure to the IRS and temporarily restricts the IRS from using enforced collection activity; PA is utilized if there is reasonable cause for the debtor to fall behind and due diligence on the debtor’s part to resolve the debt, and the IRS will relieve some of the penalties on your past due debt. More like this article. References.