Struggling with tax debt is never easy. It’s even more daunting to think about when these unwanted debt gets larger as we fail to make the payment. On the bright side, the IRS has provided programs for individuals who are incapable of paying their tax debt. Two of which are Offer In Compromise and Currently Not Collectible status. This article will give you a background on which should you opt for based on the advantages and disadvantages of each.
So the question becomes: Is an Offer in Compromise or Currently Not Collectible better? The answer is: For newer debts Offer in Compromise is usually better and for older debts Currently Not Collectible is usually better.
An Offer In Compromise is usually what a lot of tax relief companies encourage to those who need to settle their tax debt. To put it simply, an Offer In Compromise is a tax settlement where the IRS agrees to let the taxpayer pay for only a fraction of an amount of their entire debt. The settled amount varies on a case to case basis.
The IRS considers different areas for you to qualify for an OIC. These includes your current assets, household income and expenses, and number of dependents. If you generally have low income and do not have assets, then it’s most likely that the will approve your OIC. You can always hire someone to do it for you if you need legal guidance. If you decide to do an OIC on your own, we have a guide on how to do your own OIC and how to get an OIC accepted.
Being placed in a Currently Not Collectible Status means that the IRS will hold collection of taxes for the time being. It is like a $0 payment plan. Those who qualify to get into CNC usually have a fairly low income and with a lot of dependents. But does CNC guarantee you to be freed from your tax debt? Learn more about the pros and cons listed below. You can also take a look at our CNC Tax Program Review.
If you think you could benefit from the help of a tax attorney, schedule a consultation with one of our expert tax attorneys here or call us at (888) 515-4829.
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