Individuals who find themselves facing
tax debt may be eligible to settle their debt with an Offer in Compromise. An Offer
in Compromise allows qualified individuals with unpaid tax debt to negotiate
with the IRS to come to a settled amount that is less than the total owed.
OICs can be extremely beneficial in helping those who are struggling with
tax issues, but they can be difficult to attain. In this blog, our
Bloomfield tax attorney explains how an OIC can be used to settle tax debt.
Do you qualify?
It is simply not enough to show the IRS that you are willing to negotiate
a settlement. In order to qualify for an Offer in Compromise, you must
be able to show the IRS that there is “doubt as to collectability.”
Under this condition, there is significant doubt as to whether the IRS
will be able to collect your debt, both now and in the future. You can
also qualify if you show the IRS that, because of exceptional circumstances,
paying back your tax debt would not only be unfair, but would cause an
Submitting an Offer in Compromise is a formal process – to initiate
the OIC, you must complete and file the necessary documentation. Part
of the process includes disclosing detailed financial information, including
pay stubs and bank records. When it comes time to submit your minimum
offer amount, make sure that your offer is equal to the “net realizable
value” of your assets, plus the monthly income you have left after
subtracting your monthly expenses. If, for whatever reason, the IRS cannot
accept your offer, you’ll receive written explanation. The IRS usually
rejects an offer for one of two reasons: because the offer was too low
or you’ve been convicted of a serious crime. In the explanation,
the IRS will state an amount they will accept as an OIC.
Tax issues can happen to anyone. Our Bloomfield tax lawyer has extensive
experience helping clients with tax solutions that are efficient and reliable. To
schedule a free consultation, call (248) 919-8029 today!