Offer in Compromise
Some taxpayers have problems concerning the large amount of taxes they owe. This could create additional problems in terms of your financial condition. Having a large amount of Taxes will result in a difficult payment on your part. A taxpayer deserves the right to pay all of his or her taxes. With the use of Offer in Compromise, the IRS will accept the tax bill that you will pay in a less amount. This provides an effective measure in order to pay your taxes in a fast manner.
Considerations in order to avail the Offer in Compromise
- There is some assurance that the IRS can collect the bill.The taxpayer has the capacity to give it now or in the near future. The IRS often refer to this as “doubt as to collectability.” An easy way in order to make sure that the taxpayer will pay the amount at a low cost.
- There are exceptional circumstances that the payment of the tax bill causes an “economic hardship”.In addition, it would be “unfair” or “inequitable” to take. This provides the IRS an option to take the small payment you have in order to accept the payment that you will offer. Thus, this leaves you with a benefit of no taxes at all to worry.
If you have the two above considerations, it would be easier for you to have Offer to Compromise.
The Offer to Compromise Process
Submission of an Offer
The first step is submitting an offer to the IRS is a formal process. This provides an effective way in order to settle the OIC. In order to make this successful, you begin by completing the IRS Form 656, Offer in Compromise. The payment required for filing an OIC should be attached to the Form 656. The good news is there is an exemption from the fee if the monthly income you have is below the poverty rules. If you will claim the poverty exemption concerning your tax bill, you will submit an Application Fee Worksheet taken from the Form 656 booklet.
Detailed Financial Information
In doing the rules of the IRS, a taxpayer should provide a detailed financial information to the IRS using Form 433-A that is for individuals or Form 433-B that is used for businesses. This is called the Collection Information Statement. In case that you are married and reside in a community property, the Collection Information Statement includes information of your spouse even if you alone have debt in the IRS. The filling in this form should be done in a correct manner if you are serious about the OIC. The IRS checks and monitors the disclosures you make using this kind of form. This is made much more closely when availing an OIC rather than sending a request to paying taxes using the installment agreement process.
Having too many unpaid taxes will cause you to have a large financial problem in the future. If you want to clear your tax bills, come and avail your Offer in Compromise.