You have been informed by the Internal Revenue Service (IRS) that you owe X amount of money. Don't give up Hope. Now, it is possible to Negotiate with the IRS in Colorado, and get your amount due lowered.

Currently, there are several Colorado IRS Negotiation mechanisms such as Offers in Compromise, Penalty Abatement and Installment Agreements which will assist you in alleviating the payment hardships imposed by that office.

This Colorado IRS Negotiation tool is to be employed after you have been audited and informed of the amount of money you owe the Internal Revenue Service.

Firstly, the IRS will only consider your Colorado IRS negotiation request for an Offer in Compromise if one of the following criteria apply:

• "Doubt as to Liability- In some cases a Colorado taxpayer will have some question about the liability of the tax debt owed. This condition is not frequently met, but if it is, the Internal Revenue Service may be willing to grant an Offer in Compromise.
• Doubt as to Collectability- The amount of tax debt is not in question, but the Internal Revenue Service does not think they will be able to collect the full amount of federal tax debt owed.
• Effective Tax Administration- Under certain conditions the Internal Revenue Service realizes that collection of federal tax debt may cause "an economic hardship which is inequitable and unfair", if this is the case, they may be willing to agree to an Offer in Compromise. The elderly and disabled most often qualify for an Offer in Compromise under this condition." (www.offerincompromiselawyer.com)

You may file your Offer in Compromise through IRS Forms 656 (Offer In Compromise) and 443-A, if you filed as a natural person or 443-B, if you filed as a small business company owner. An explanation of each form is, as follows:

• "IRS Form 656- Offer in Compromise. Form 656 provides information about the taxpayer's financial status and the offer the taxpayer may be able to make to pay their outstanding IRS debt.
• IRS Form 443 A- Collection Information Statement for Wage Earners and Self-Employed Individuals. This form will outline additional taxpayer financial information and the ability for the taxpayer to settle tax debt.
• IRS Form 443-B- Collection Information Statement for Businesses. This form is similar to the Internal Revenue Service Form 433-A but it contains business information. If you are including your business in the Offer in Compromise, Form 433B will need to be completed.
• IRS Form 656-A- Income Certification for Offer in Compromise Application Fee and Payment. This form will need to be completed if you are requesting the fee for the Offer in Compromise be waived." (www.offerincompromiselawyer.com)

Normally, Offers In Compromise are rejected because the tax payer submitted too low a sum to pay. If rejected, this is where the real Colorado IRS Negotiation begins. Your first step is to contact the IRS employee who initially rejected your offer.

Another Colorado IRS Negotiation's tool in attempting to reduce the amount of monies due the IRS lowered is Penalty Abatement. Penalties, in Internal Revenue Service jargon, are "the additional fees that are assessed on your taxes, based on how much you owe, for every month you are behind in payments. The penalties are charged in addition to the interest that is also compounded on past-due taxes." (www.taxhelprelief.com) In order to be considered eligible for Penalty Abatement, though, you must have started making a concerted effort to pay back the IRS.

Do you qualify for a Penalty Abatement? Not only must you be breaking your back to pay the Internal Revenue Service the monies you owe them but, there must also be reasonable cause, proof that you have practiced due diligence in paying back and lack of neglect.

Fortunately for us, when involved in this particular type of Colorado IRS Negotiation, the IRS's list of reasonable causes is quite extensive ranging from "a natural catastrophe such as a fire or flood of your home, a difficult divorce that impacted your finances adversely, a long stretch of unemployment, a death in the family or a long period of illness, bad advice from an accounting or tax professional and many others." (www.taxhelprelief.com) Keep in mind, though, that you will need a tax expert to submit your Penalty Abatement Request. Also, do not apply for one before you start making any kind of payments.

Yet another Colorado IRS Negotiation recourse is the Request for Installment Agreement, also referred to as a "payment plan". As defined by the IRS, an Installment Agreement "will allow for the full payment of the tax debt in smaller, more manageable amounts." In other words, you repay your tax debt over a period of time which is commonly no longer than 60 months (5 years) depending on the type of installment agreement you go with. In most Installment Agreements, it carriers and interest rate which means the longer you take to pay off your tax debt, the more you end up paying in the end (more than original." (www.taxdebthelp.com)

There are several types of Installment Agreements, which are more difficult to obtain. The easiest is the Guaranteed IA which is "guaranteed" as long as you meet the requirements set forth by the IRS. This is only offered to those taxpayers that owe $10K or less in taxes and the total amount can be paid off in a period of 3 years or less." (www.taxdebthelp.com) The Streamlined Installment Agreement is for those that owe 25K or less, a Verified Financial IA is for debtors with over 25K owed or who, simply, are unable to meet the minimum monthly payment. Lastly, there is the Partial Payment Installment Agreement which "allows you to pay less than the total amount owed over a period of time." (www.taxhelprelief.com)

Yet another Colorado IRS Negotiation recourse is the Request for Installment Agreement, also referred to as a "payment plan". As defined by the IRS, an Installment Agreement "will allow for the full payment of the tax debt in smaller, more manageable amounts." In other words, you repay your tax debt over a period of time which is commonly no longer than 60 months (5 years) depending on the type of installment agreement you go with. In most Installment Agreements, it carriers and interest rate which means the longer you take to pay off your tax debt, the more you end up paying in the end (more than original." (www.taxdebthelp.com)

There are several types of Installment Agreements, which are more difficult to obtain. The easiest is the Guaranteed IA which is "guaranteed" as long as you meet the requirements set forth by the IRS. This is only offered to those taxpayers that owe $10K or less in taxes and the total amount can be paid off in a period of 3 years or less." (www.taxdebthelp.com) The Streamlined Installment Agreement is for those that owe 25K or less, a Verified Financial IA is for debtors with over 25K owed or who, simply, are unable to meet the minimum monthly payment. Lastly, there is the Partial Payment Installment Agreement which "allows you to pay less than the total amount owed over a period of time." (www.taxhelprelief.com)