Offers in Compromise – What You Need to Know
You may think there’s no way out of your financial bind, yet a nagging feeling tells you that relief is possible.
Although you may have heard of “offers in compromise,” all that appears when you conduct a web search is either military or disaster-related content, or mountains of legalese about obscure provisions of the Internal Revenue Code.
It seems like you’re just spinning your wheels and never going to go anywhere. So, what advice would you provide to a normal person?
In the following paragraphs, we will go through the four most important aspects of an offer in compromise, and how they relate specifically to your back taxes.
First, What It Is
Offers in Compromise (OIC) is a settlement reached between a taxpayer and the IRS to settle tax debt for less than the entire amount due.
When it is in the best interest of the taxpayer and the government, and there is reasonable doubt regarding the taxpayer’s capacity to pay the full amount of taxes owing, the IRS may accept an offer in compromise.
Second, What Is Required To Be Eligible For An Offer In Compromise
Submitting an offer in compromise initiates a review by an IRS agent. Before deciding whether to grant your request, they will consider several factors.
One consideration is whether or not they can get more money via legal action than they would if they accepted your offer. Another factor to consider is whether or not your financial situation is likely to improve in the future.
The third consideration for the broker is whether or not your offer is considered fair by the market. The IRS will weigh all of these considerations together before deciding whether or not to accept your offer in compromise.
Possible Offers In Compromise
If the Internal Revenue Service (IRS) decides to reject your Offer in Compromise, you will be given a reason in writing. The judgment may be appealed, and a fresh offer may be made.
If you decide to appeal, you’ll need to back up your claims with further evidence. The financial statement and accompanying documents should be up to date if you submit a new offer.
If the IRS sees that you are experiencing financial difficulty, they may accept your offer but also work with you to set up a payment arrangement or installment plan.
Using The Services Of A Tax Preparer
Here are some things to keep in mind if you’re thinking about hiring a tax specialist to assist you with an offer in compromise. It’s important to note that taxpayers may only be represented before the IRS by lawyers, CPAs, or registered agents.
Second, whether or not the offer is accepted, the taxpayer is still liable for the tax expert’s expenses. To file an offer in compromise with the IRS, you need not hire a tax expert if you don’t have the financial means to do so.
However, you should contact a professional to assist you because of the intricacy of tax matters, particularly concerning tack taxes. To read more, please visit this link.