When you have tax problems, it’s easy to get confused about what your options are. Here’s a quick run-down of the most common tax settlements, so you can have a better idea of where to start when you’re looking to file for tax resolution. While the forms and definitions can be rather dense and impenetrable, the basics of each option are pretty straightforward. tax resolution

Innocent Spouse Relief: Filing joint tax returns is an easy way to reduce paperwork and make filing tax returns a bit less of a hassle. But it also means that both spouses are equally responsible for paying the taxes owed. If there is an underpayment of tax, due to an intentional omission or an error, both parties can be held liable. However, the IRS understands that the back taxes aren’t necessarily the fault of both, and innocent spouse relief is the channel you can use to relieve your responsibility for tax problems created by your spouse, or ex-spouse. There are three types of innocent spouse relief, and filing for this type of tax help can alleviate all or part of your responsibility for the tax issue.

Offer in Compromise: An offer in compromise is a powerful tool used to actually reduce the amount of money you owe to the IRS. The tax authorities understand that in some situations, it’s not realistic to expect that a taxpayer can repay their entire back taxes within a reasonable period of time (due to the size of the debt in relation to the taxpayer’s assets and income). In these cases, the IRS realizes it’s in their best interest to collect some of the debt rather than nothing at all–enter the offer in compromise. The taxpayer proposes an alternate amount, often far less than the delinquent tax and combined penalties/interest, to settle their whole tax problem, and if accepted by the IRS, this tax debt reduction agreement can make a dramatic difference in your ability to finally pay off the tax debt.

Remember, offers in compromise are an appealing option to any taxpayer with delinquent taxes, but these tax debt reductions are extremely hard to qualify for. Approximately 75% of all offers in compromise are rejected every year, so it’s important to not get fixated on the allure of IRS debt forgiveness, especially if you don’t even meet the standards to apply for this type of tax resolution. It is highly recommended that you work with a qualified tax consultant to apply for an offer in compromise as this will give you the best chance of securing this tax relief option.