Offers in Compromise
“Settle your tax debt for pennies on the dollar.” Maybe you’ve seen the ads on TV. Or may not, now that the IRS is cracking down on these blatantly misleading commercials. But it is possible to settle your tax debt for less than what you owe. It’s fairly complicated so you should talk to a tax lawyer, but this is the basic idea.
Add up the value of everything you own, less secured loans (i.e., car loan, mortgages). Take your monthly income and subtract living expenses to arrive at excess income. Add your excess income to the value of your property. This is what the IRS figures it can levy on (seize from you). Add a dollar to that amount and offer to pay that amount to the IRS in an Offer in Compromise. Since you’re offering more than what the IRS could take from you, the IRS may accept your payment as settlement in full and call it a day. The Wisconsin Department of Revenue has a similar program.