Palm Beach Tax Debt Settlement Lawyer

Palm Beach Tax Debt Settlement Attorney

There are many reasons that you may incur tax debt, including sudden emergencies and other chaotic times in your life that can lead to errors in information, late payments, and missed payments. If a taxpayer ignores this debt, the interest will only grow over time, and penalties will accrue. If you cannot pay back your tax debt, it is crucial to understand your options to prevent the issue from getting worse. A Palm Beach tax debt settlement lawyer can help.

Securing a payment plan or settlement with the Internal Revenue Service (IRS) or Florida Department of Revenue (DOR) can prevent worse financial consequences and help you address your debt effectively and according to your available resources. A tax debt settlement attorney in Palm Beach can help you take important actions and understand your situation.

TaxSmith, LLC: Supporting Taxpayers in Palm Beach

The team at TaxSmith, LLC, has decades of experience in tax law, and we are proud to help individuals and business owner taxpayers navigate their tax issues. When you bring your case to us, we can review your financial information and tax debt to determine what options you qualify for. We can give you clear and actionable advice on the ideal method to resolve your debt and guide you through the process.We can negotiate directly with the IRS—whether for penalty relief, payment plans, or hardship status—to align solutions with your financial reality.

Tax Settlements and Options for Debt Relief

The IRS will review several aspects of your financial circumstances to determine if you qualify for a specific debt settlement option. Not all taxpayers qualify. When you owe back taxes, penalties, and interest to the IRS, the default assumption is that you must pay the amount in full. You may only be eligible for alternate ways to pay if you do not have the financial ability to support yourself and pay your debt.

When this occurs, the IRS or DOR is willing to compromise to partially recover the debt they are owed. When you cannot pay your debt, you need to take action. The closest Taxpayer Assistance Center Office to Palm Beach is at 625 N Flagler Drive in West Palm Beach. An experienced attorney can help you by representing you to the tax agency.

Your attorney can review your situation and determine what option you may be eligible for. Some options for debt repayment include:

• Penalty abatement. You may be able to waive specific penalties through penalty abatement. Some penalties and their interests can be removed if it is your first penalty or if you have a valid reason for incurring the penalty. You are still required to pay any tax debt you owe, but removing penalties and their interest can significantly reduce the amount of your tax liability.
• Installment agreements. This is a payment plan that you negotiate with the IRS. You must still pay the entirety of your tax liability, but you can do so over a longer period of time. This is especially useful for individuals with restricted budgets. It can make the debt more manageable while preventing tax agency collection actions like wage garnishment or liens. It prevents aggressive collection actions like tax liens, which can freeze assets or damage credit if unresolved.
• Offer in compromise. An offer in compromise is what people think of for tax debt settlement. If you are approved for an offer in compromise, then you can settle your entire tax liability for a lower amount. This amount may be paid back in a lump sum or through a payment plan.
  While this is a very useful tool for those who qualify, the approval rate is low, and it can be hard to secure this debt settlement. Out of 30,163 proposed offers in compromise in Fiscal Year 2023, the IRS only accepted 12,711.
• Innocent spouse relief. When your spouse or your ex-spouse incurred tax debt, and you have been affected due to the joint tax return filing, you may be eligible for innocent spouse relief. You must be able to show that you had no knowledge of their underpayments or other errors that led to the liability and that you did not benefit from the money they retained.
• Currently Not Collectible. Your tax debt can be marked Currently Not Collectible, which prevents collection actions by tax agencies and gives you some time to recover financially. Eventually, you will have to pay the debt in full. This is a useful tool if you are in sudden and temporary financial hardship.

FAQs About Palm Beach,FL Tax Debt Settlement Law

How Much Does the IRS Settle for?

If you qualify for an offer in compromise, the IRS will usually settle for an amount that you can reasonably pay, given your financial circumstances. Working with a tax attorney can help you understand the requirements to potentially qualify for an offer in compromise and what a reasonable settlement to suggest in your application is. An offer in compromise is a final option for taxpayers who cannot settle the debt another way.

What Is the IRS Six-Year Rule?

The IRS’s six-year rule may apply to taxpayers who do not qualify for a streamlined payment plan but cannot pay the full tax liability. As long as the taxpayer can pay off their full tax liability within six years, then the IRS allows their living expenses and certain payments to exceed the Collection Financial Standards.

Does the IRS Forgive Tax Debt?

The IRS does forgive tax debt, but only in specific circumstances. You might be able to apply and qualify for tax debt forgiveness if you do not have the financial ability to pay off your tax liability or if doing so would put you in financial hardship. Few taxpayers qualify for offers in compromise, which settle debts for less, but other forms of debt reduction and payment plans exist. These options can help taxpayers significantly.

How Badly Does a 1099-C Affect My Taxes?

A 1099-C is a Cancellation of Debt form, and it means that the amount of the canceled debt likely must be reported as income. This is taxable income, which can lead to a significant cost to you depending on the amount of the canceled debt. It is considered income because you benefit from not having to pay the debt. There are some debts that are exempt from being considered a cancellation of debt income or gross income.

Resolve Your Tax Debt With TaxSmith, LLC

TaxSmith, LLC, can help you successfully navigate applying for the right resolution to your tax debt. Let us help you manage your tax liability efficiently. Contact our firm soon.