September 11, 2018
An offer in compromise is the IRS’ tax resolution debt settlement program. It’s a program for taxpayers who owe the Internal Revenue Service more money than they can afford to pay.
It’s the IRS’s version of a “fresh start” when it comes to tax debt. If approved, the IRS accepts a lesser amount (sometimes a fraction of what’s owed) to settle your debt. However, it isn't always easy to gain approval due to its strict criteria. Your odds for acceptance increase significantly when you have experience negotiating with the IRS.
The IRS considers your income, assets, expenses, ability to pay, and whether paying the full amount would cause financial hardship.
Information You Need to Submit an Application for an Offer in Compromise
It's important to remember that the IRS wants its money and will only accept an offer in compromise if it thinks it wouldn't receive any money otherwise. You must be current with all filing and payment requirements to apply. Additionally, you cannot be in the process of filing bankruptcy.
You can find more information about the IRS Offer in Compromise on the IRS website here. If you want help with your back-tax problem, contact us today for a consultation.
After supplying the IRS with your name, address, social security number, and the amount of tax debt you would like it to consider for this program, you need to supply details about your income, assets, and expenses. In addition to wages, your personal income can include:
Your assets can include things such as:
For the expense section, you should only include items you pay regularly. These may include:
Compiling this information and completing the application correctly can be challenging even for tax practitioners who don’t have expertise in dealing with the IRS. Your CPA or tax advisor most likely doesn’t have experience with resolving back tax issues. That’s why we recommend working with a specialized tax resolution professional like us to better understand this option and increase your chances of approval.
The combination of running a business and your life and preparing for tax time can drive some people into a slight panic. But no need to get stressed if you are prepared. Now is the time to start organizing all documents required to file your tax return.
Like the old paraphrased saying goes: In this world, two things are certain—death and taxes. The recent federal tax overhaul changed a lot of rules, so it’s as important as ever to understand your tax obligations, including those on Social Security benefits.
Unfortunately, cyber scammers never take a vacation. In fact, the IRS has issued a warning of a surge in fraudulent emails that bait potential phishing victims with fake tax transcripts. Links within these emails lead recipients to documents containing the well-known malware, Emotet.