The Two Most Common IRS Settlements Defined

There are many IRS tax settlement options to consider. Do you know which ones are most common? If you owe the IRS any money, you will want to learn as much as you can about an offer in compromise as well as a partial payment installment agreement. Both of these have a lot to offer, but until you know the pros and cons you will have a difficult time making a final decision on which method to follow.
An offer in compromise is an agreement between the IRS and a taxpayer which allows the taxpayer to settle their liability for less than the total amount owed. If you have ever heard the phrase “settling for pennies on the dollar” an offer in compromise is being referred to. The issue with this is that the IRS does not usually accept offers. Generally speaking, only 10 to 15 percent of offers are accepted. If the IRS believes that the liability can be paid in another way, they are going to deny your offer in compromise.
As a taxpayer interested in an offer in compromise, you must make an offer that is equal to or greater than what the IRS could collect on their own – this is known as reasonable collection potential. This is how the IRS measures your ability to pay, including how much they think you can afford. Remember, they take into account what they can collect through levies and liens.
Many taxpayers find that requesting a partial payment installment agreement from the IRS is much easier than an offer in compromise. With this, you make regular monthly payments to the IRS. But in the end, the total is not the full amount of what you owe. For this reason, a partial payment installment agreement is similar to an offer in compromise. In the long run, you are settling your tax debt.
A partial payment installment agreement is a great option if you do not have the money to pay in full, because you are able to make monthly payments. And as noted above, you are able to avoid paying your entire tax liability. 
Are you interested in either of these tax settlement options? If you owe money to the IRS, but do not feel that you can pay in full, your answer should be yes. Of course, you are sure to have some questions about the settlement process and how it works. In this case, you have two options. You can contact the IRS for further information, or hire a tax professional. Most people hire a professional who has experience helping clients settle tax debt.  
The offer in compromise and partial payment installment agreement are two of the most common tax settlement methods. The one that you choose depends on your situation, including how much you owe and what you can afford to pay. Once you consider both options, you can decide which one gives you the best chance of acceptance. Either way, an offer in compromise and a partial payment installment agreement are beneficial.