In part, the IRS is one of the most effective collection agencies in the world due to the authority given to it to pursue collection through any number of hard-edged avenues, such as wage garnishments, tax liens, liquidation of assets, etc., in cases of continued tax evasion. For that reason, it is to the taxpayer’s advantage to pursue the avenue of IRS tax relief that is most beneficial to the individual’s financial circumstances. It should be noted that while the IRS has the authority to collect, tax law assures that the IRS neither harass nor create unwarranted strife in the collection of back taxes.
The IRS is willing to work with the individual to pursue IRS tax relief, and employs a number of options to that end, giving each taxpayer a range of options in the hopes that one will particularly suit the individual’s financial state of affairs. These include: (1) Installation Agreements; (2) Currently Not Collectible Status; and (3) Offers in Compromise. By working actively with IRS representatives, an individual may select the best method of payment.
In the pursuit of any of these methods of tax debt resolution, the IRS will examine the state of the individual’s finances. At the end of their analysis, a collection officer will calculate the taxpayer’s Reasonable Collection Potential (RCP), which, in part, determines the amount the IRS expects to collect from the taxpayer. Negotiating openly and thoroughly with IRS representatives allows liable parties to find an appropriate method of payment, thereby alleviating their tax debt in the best manner possible.
