An unwanted situation in life for a person is to get involved in a tax debt issue
and seek the help of an attorney tax consultant as that is the most logical and feasible solution. Debt settlement is a situation that arises when the debtors and creditors mutually agree to a reduced amount of the full debt as the lump sum amount outstanding is high as a full and final settlement. The attorney tax consultant may prepare various options to help you to come out of the crisis. The options may be
Offer in Compromise (OIC)
Installment Agreement (IA)
Streamline Installment Agreement (SIA)
Conditional Expense IA
Stair-Step IA
The Traditional Installment Agreement
Partial Pay Installment Agreement (PPIA)
Currently- Non-Collectible (CNC)
Penalty Abatement (PA)
Taxation laws of a country have its own mode to solve these problems. The attorney tax consultant is thus an important person as he has a thorough knowledge on the taxation part. As per the IRS norms, if debts have been cancelled partially, one has to ensure that the cancelled part of the debt is considered as a taxable income. As per the IRS, if the debt forgiven exceeds $600, the same has to be considered as a taxable income. The creditor forgiving the debt must also provide the relevant tax form which is kept in the notice of the attorney tax consultant. However, if the tax payer has already become insolvent, the attorney tax consultant says that tax forms are not required as it is assumed that the debt has been forgiven by the creditor. An insolvent customer is not charged as it means that the persons debts are exceeding his earnings and assets.
The attorney tax consultant is of the opinion that the Better Business Bureau has ensured for the debt settlement policies, an automatic downgrading policy with a motive to prevent customers against any unethical business practices, to confront debt relief as an alternative to bankruptcy. Groups associated with the trade associations will help to maintain high industry standards. An attorney tax consultant confirms that major trade associations in the debt settlement area are United States Organization for Bankruptcy Alternatives (USOBA) and The Association of Settlement Companies (TASC).