There are many ways to negotiate with the IRS to reduce how much you have to pay them. Bankruptcy can be a good option, but only if you meet the time frame statutes; and although a bankruptcy might help you get rid of a tax levy, the tax lien on your credit report might linger. Also, a bankruptcy is not always the fastest way to get your credit score repaired.
If you live in Huntington Beach or Costa Mesa you can settle your IRS debts for just pennies on the dollar with the Offer in Compromise program. This program can allow taxpayers to settle with the IRS on tax debt that has been incorrectly assessed, but usually the program is used to show the IRS that you can only afford to pay part of what you owe.
The tax code states: "We will accept an Offer in Compromise when it is unlikely that we can collect the full amount owed and the amount you offer reasonably reflects the collection potential..." (Internal Revenue Code §7122).
Often it is possible to fully and completely eliminate the taxes you owe - even all penalties and interest - at a large discount. There is no preset bottom limit that the IRS will accept to settle your debt; if done correctly your debt may be settled for only 5-15% of what you presently owe. The key is to determine the least amount that the IRS will accept from you before you make the offer.
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