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This is a great question and there is really a one sentence answer to it… that goes like this.

There may not be a better slogan ever invented. I mean who wouldn't want to settle their debt for just a fraction of the amount owed. The problem is that it may be overused. The pitch-person on TV and Radio promises to use a soothing voice, insider knowledge and secret negotiating skills to save you from years of pain while you pay back the IRS. If only it were always so simple. In real life, it isn't a simple thing to convince the IRS to settle for less than what it is owed. It requires a tremendous amount of analysis, planning, knowledge and work and it doesn't hurt to have a good set of facts on your side to begin with. In order to settle the tax debt for less than what is owed you have to prove to the IRS that you don't have the assets and/or income to pay the debt off before the IRS Statute of Limitations period on collection runs out. If the IRS thinks that you have the money to pay the debt before that time period runs out, it won't settle. This is true whether I help you, you do it yourself, or you enlist the guy with the soothing voice. The process the TV commercial is talking about is called in Offer in Compromise. It is just an agreement between you and the IRS to settle the debt for less than what is owed. The agreement is reached only after those income and assets are reviewed very closely to determine what the IRS calls your “reasonable collection potential”. In order for it to review those income and asset numbers you have to supply a bunch of financial information that includes a financial statement, supporting documents and your signature given under oath that your disclosures are accurate. As pre-conditions to the IRS' consideration of the Offer in Compromise, you must: 1. File all Tax Returns 2. Make all required estimated tax payments for the current year 3. Make all required federal tax deposits for the current quarter if you are a business owner with employees If you have done the above and the IRS agrees that you can't pay all the debt back before the Statute period runs out, you should be able to convince it to settle for less than what you currently owe. Most Offers in Compromise fail however. Historically, the success rate has been less than 25%. Recent changes to the Offer Program have increased that acceptance rate somewhat. In any event, it is a very good idea to have your situation at least reviewed/analyzed closely by someone that has experience with the IRS Offer in Compromise Program.

An ongoing IRS Installment Plan doesn't extend the IRS Statute of Limitations period for the collection of debt.

The IRS' purpose outside of playing favorites, is to collect money. The IRS is really good at this and would be even better if there weren't some doggone rules that restrain it.

An IRS Offer in Compromise can be a great tool to reduce your tax debt.

Small business is the lifeblood of our economy. Starting a small business is difficult though.

The bankruptcy attorney has explained that the money in your 401k plan is safe from creditors, and therefore safe from those creditors and the bankruptcy trustee if you file a chapter 7 bankruptcy.

Earlier this month the First Circuit Court of Appeals upheld the conviction of a couple who based their actions on some bad advice from their dentist.

When a creditor cancels or “forgives” a debt, it is deciding not to collect that debt. It does this for various reasons, none of which are for the purpose of helping you.

About a week ago on January 4, the 5th Circuit Court of appeals in the case “McCoy v. Mississippi State Tax Commission” ruled that a debtor wasn’t entitled to a discharge of state taxes where the tax return was filed late even though it was filed by the taxpayer.