Posted on
November 4, 2009
at
5:13 am
I think that i'm going to have my debt settled soon but I'd like to know how the IRS are going to tax it or if at all. Do settlements get taxed?
Posted on
November 4, 2009
at
5:17 am
Yes if the amount is at least $600, that's considered taxable income by the IRS. The creditor provides the form for this.
Posted on
November 4, 2009
at
5:21 am
There is such as thing though as insolvency, or offer in compromise, but you have to qualify for it. One of the qualifications is having less than $10,000 in debt and having a good payment record for the past five years.
Posted on
November 4, 2009
at
5:22 am
Speaking of Offer in compromise:
Section 7122 of the IRS 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. Our goal is to collect what we can at the earliest possible time with the least cost to the government."
Posted on
November 4, 2009
at
5:24 am
Do settlements get taxed? YesDo people actually qualify for the Offer In Compromise? About 2%, I read.Question is, what are the consumer's other options?
Posted on
November 4, 2009
at
5:28 am
I don't want to say bankruptcy - not yet.I think the consumer has to see a tax debt consultant to explore the other installment possibilities for him/her.
Posted on
November 10, 2009
at
10:58 am
All great answers. Settlements can destroy your credit, having all your accounts charge off to begin settlement negots. Looks like you have already taken that route but have some very valuable info above. Great forum.
Posted on
November 10, 2009
at
11:04 pm
Isn't insolvency a different concept from the Offer in Compromise per se? The latter from what I know is offered to consumers who aren't able to pay for their IRS dues.
Posted on
November 16, 2009
at
1:39 am
Right. Insolvency is the state wherein your debts are greater than your assets. An offer in compromise on the other hand is a payment procedure offered by the IRS to consumers who have tax debt. Unfortunately only 2% of those with tax debt are able to qualify for this.
Posted on
November 18, 2009
at
6:21 am
Where do you get that form if settlements get taxed
