How to Get Tax Relief through the IRS Offer in Compromise ProgramHard working American taxpayers, who never before qualified for tax relief, may now qualify. If you owe back taxes to the IRS, you can permanently resolve your debt by negotiating an offer in compromise tax settlement with the IRS. The IRS Offer in Compromise program is designed for people who, for whatever reason, are absolutely incapable of paying off their tax debt in full. It can be a powerful tool in helping you permanently eliminate your tax debt. If you owe back taxes to the IRS and you are unable to pay the debt in full, you may be eligible for tax relief through the offer in compromise program. It is important to consult with a qualified tax professional (a tax attorney, CPA or Enrolled Agent who happens to be a Certified Tax Resolution Specialist) first to analyze your current financial situation, previous tax returns and other records. By determining exactly how much you owe the IRS, you are ensuring that you're not obligating yourself to pay even a penny more than what you owe. Under the IRS Offer in Compromise program, you and your tax attorney or tax resolution firm can negotiate with the IRS a final settlement amount that will retire your tax debt once and for all. Oftentimes, the offer in compromise tax settlement amounts to pennies of the dollar of your tax debt. In this current economic downturn, the IRS has announced that it will be providing help to those Americans struggling to meet their tax obligations this year. This is a difficult time for many Americans facing financial hardship, but with the IRS pledging to offer greater flexibility to troubled taxpayers, there's a unique opportunity for Americans to get the tax help they need now to resolve their IRS debt by qualifying for an offer in compromise settlement. Although you will want to discuss the particulars of your tax situation with your tax resolution consultant or tax attorney, here are some things you will need to know about qualifying for the Offer in Compromise program: Who can file an Offer In Compromise? Any taxpayer may file: individuals, married couples, trusts, corporations, limited partnerships, limited liability companies, foundations, associations and other non-profit organizations and estates. In each instance, a duly authorized individual must sign the Offer in Compromise. Additionally, working with a tax resolution specialist or tax lawyer can greatly increase your chances of successfully resolving your IRS tax problems. What are the requirements for an Offer in Compromise? In order to be considered for an Offer in Compromise, a taxpayer must meet all of the following requirements:
Can penalties and interest be compromised under an Offer in Compromise? Yes. Penalties and interest can both be compromised in the same way as the underlying tax liability. In fact, in submitting an offer in compromise, you must include all owed taxes, plus penalties and interest, for your offer to be considered. However, if penalties are your major concern, then you will want to consider applying for penalty abatement, particularly if you have reasonable grounds for the IRS to waive the penalty. The penalty abatement process is far simpler than an offer in compromise, however you will still need expert representation from a tax attorney, CPA or EA that is a Certified Tax Resolution Specialist to work with the IRS on your behalf to request that your penalties be removed/reduced. How likely is it that the IRS will accept an Offer in Compromise? In the past, the chances of acceptance for an offer in compromise were poor - only about one in five were accepted by the IRS. The odds of settling with the IRS are now far better because the IRS has liberalized its offer in compromise policies. Taxpayers and their advisors, in turn, have also become more realistic in their offers to the IRS. A realistic Offer in Compromise now stands an excellent chance of acceptance - and expert help from a CPA, tax attorney or Certified Tax Resolution Specialist can help you increase your chances of reaching a fair and workable settlement with the IRS. How long does it take for an Offer in Compromise to be approved by the IRS? Generally, you must allow 6-12 months. If your offer in compromise case gets rejected and we take it to Appeals, it could take longer. But no matter how long it takes a qualified tax professional who is a CPA, Tax Attorney or Enrolled Agent who is a Certified Tax Resolution Specialist can often negotiate to have all collection activities suspended. Will an Offer in Compromise show up on my Credit Report? No. Unlike a bankruptcy, an Offer in Compromise does not get reported to the credit reporting agencies. An offer in compromise will not negatively affect your credit score. However, ignoring the problem will cause the IRS to file a notice of federal tax lien with your county recorder, which WILL show up on your credit report. For more information on submitting an Offer in Compromise or to get professional tax advice on reducing your IRS debt, visit www.taxresolution.com for a free tax relief consultation or call 866-IRS-PROBLEMS. Michael Rozbruch, one of the nation's leading tax experts, is a Certified Tax Resolution Specialist (CTRS), licensed CPA in the state of Maryland and the founder of Tax Resolution Services (http://www.taxresolution.com/). He teams up with an expert staff of tax attorneys, CPAs, and tax relief professionals to help individuals and small businesses solve their IRS problems with tax liens, unfiled back taxes, offers in compromise, wage levies, tax relief, delinquent returns, tax debt installment plans, bankruptcy and protecting an innocent spouse from unfair tax burdens. |