The first law when negotiating with the IRS with regards to back taxes and tax debt is that you must assess whether or not they will make a deal or compromise with you on an alternative payment amount. You must simply know that they aren't looking at how much you owe; they are looking at how much you can settle. Many people who are aware that they owe a considerable amount in back taxes typically find a process known as an Offer in Compromise. Upon hearing the sales phrase that you can settle your IRS tax debt for pennies on the dollar, they immediately feel that all of their problems are solved. Things are not that simple, unfortunately.

You must not have any investments, not make sufficient money to settle your debt, and not have properties to be able to benefit from an Offer in Compromise. You should be poor for the IRS to realize that accepting the small amount of money you can give is more cost effective than going after what little you have.

So how do you decide what you must offer to pay back when you submit your Offer in Compromise to the IRS? What will help you succeed in decreasing your back taxes? You cannot just guess what number you should settle. Also, do not even consider simply selecting to pay back a certain percentage of your total debt figure. What the IRS will have you do is calculate how much you likely are able to pay. Two IRS worksheets can help you calculate this amount - Form 656 and Form 433-A.

When you submit your Offer in Compromise and the appropriate supporting paperwork, the negotiation starts. The IRS will send a counter offer that is higher, sometimes the whole, figure if your first offer is not sufficient. If they come back with the whole figure, don't worry. This negotiation has various factors that can either hurt you or help you.

As a benefit in most situations, the IRS will stop their current actions against you when you submit an Offer in Compromise. Until your Offer in Compromise has either been dismissed or accepted, efforts such as garnishing your wages will be often put on hold.

You still have other payment methods to think about, even if the Offer in Compromise is dismissed. You can negotiate an installment plan instead of having to settle your entire tax debt in full at one time. But to stop the interest from accumulating on your back taxes, it's still best to pay the total figure as soon as possible.

One thing to keep in mind is that, from the moment that you submit your Offer in Compromise and begin the negotiating process, the statute of limitations on your tax debt basically extends by the period of time it takes to come to a decision. So if the process takes a year for your case to be dismissed, the statute of limitations will be extended by a year.

Please feel free to contact us at getirshelp.com or by all means call us tollfree at (888) GETMISH 438-6474 We're here to help with all of your problems with the IRS! It's not your fault so call us now!

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