This guide helps you understand your options and associated costs if you need relief from IRS debt. There are primarily three ways to get tax relief help, including offer in compromise, installment agreements, and currently not collectible or hardship options.
Cost is critical of course, but let us quickly recap some of your tax relief options:
What Are Your Tax Relief Options?
Following, find details for three ways to resolve unpaid IRS debt.
1. Offer in Compromise
An Offer in Compromise reduces the amount you have to pay. This is a good option to consider if you can’t pay the full amount you owe without financial hardship.
The factors that impact eligibility include:
- Ability to pay
- Asset equity
The IRS typically approves an offer in compromise if that’s the most money they can collect within a certain timeframe.
The IRS returns your application if you haven’t filed tax returns and paid the corresponding estimated payments. This option isn’t available for the current tax year.
2. Installment Agreements
The IRS automatically approves an Installment Agreement if your IRS debt is less than $10,000.
You must meet the following criteria:
- Have no late payments or late tax filing in the last five years. This excludes filing extensions.
- You have filed all your tax returns.
- You agree to file and pay all future taxes on time.
- You agree to let the IRS keep your refunds in future years.
To calculate your monthly payments, add the total taxes due plus penalties and interest, then divide the total by 36. If desired, you can make overpayments to bring down the debt faster.
If you owe less than $50,000, you may also file for a Streamlined Installment Agreement. With this monthly payment plan, you can repay your debt in up to 72 monthly payments. The IRS will not require you to submit detailed financial information and records (like bank statements).
If you owe less than $100,000, you may qualify for a streamlined installment agreement that can be repaid in up to 84 monthly payments.
Outside of the “Streamlined” installment agreement, you may still qualify for a monthly payment plan. The IRS will review your income and expenses and determine what the disposable amount of income is at the end of the month. That disposable amount of monthly income becomes your Installment Agreement.
3. Currently Not Collectible
Non-collectible Status is an option for taxpayers the government decides can’t pay their IRS debt. If your account is marked as Currently Not Collectible, the IRS stops the collection process —no more phone calls and threatening letters. This option is only available for back IRS debt, not current and future taxes.
How Much Does Tax Relief Cost?
On average, you can expect to pay around $4,000. Costs range between $1,000 (on the extremely low end) and over $10,000 for tax relief help. Importantly, tax resolution firms almost never show their pricing up front.
Even the lowest end of the range is over double the cost of resolving IRS debt through Wiztax. And remember, at Wiztax you can take our online tax relief evaluation for free.
Avoid Set Up or Consultation Fees
Tax resolution firms can first charge $400 to $600 to offer you an “initial consultation”. After this, billing varies based on a percentage of the debt, the time needed to prepare your documents or a flat fee.
- Time-based fees are based on an hourly rate for resources that work on your case.
- Debt-based fees are based on a percentage of your IRS debt.
- Flat rates are a set price you pay for your tax resolution assistance, regardless of how long it takes to complete your application.
The Wiztax Difference
Now there’s a new way to get tax relief help and quickly settle your IRS debt. Wiztax charges a one-time payment of $489 — no additional fees are added later in the process. There are no other charges of any kind. We believe in transparency and fairness.
Our automated online tools help you determine whether to request an offer in compromise, installment plan or Currently Not Collectible status. Our tool will then fill out all the required IRS forms for you automatically.
Find out why our revolutionary system is gaining so many positive reviews from clients. Forget about tax resolution firms that want you to pay a percentage of your debt or a percentage of how much they can save you. Start for free and let us show you how we can help.
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