Do You Need An IRS Offer In Compromise?
Do you have a tax debt with the IRS? One solution that may help you pay back taxes for less than what you owe is an Offer in Compromise (OIC). Depending on your situation and how much you owe, an OIC may be an optimal tax resolution to settle with the IRS so you can move forward in your life without the weight of tax debt.
Our attorney at Morgan Sebastian Law, PC, is a skilled federal and state tax attorney with experience helping clients resolve tax debt through relief services, such as an OIC. If you’re facing mounting tax debt, you need competent counsel to help you resolve your tax debt with the most favorable outcome possible. To schedule a consultation with an our tax attorney at Morgan Sebastian Law, PC, call 877-938-1350.
What Is An Offer In Compromise?
An offer in compromise is an agreement made between the IRS and eligible taxpayers designed to reconcile the taxpayer’s liability and secure collection efforts. When tax debt becomes far more than a taxpayer can viably pay, this tax relief program may be an optimal resolution that settles their obligations for less than the amount owed. It’s important to note that the IRS has the authority to resolve federal tax obligations by agreeing to a payment lower than the full amount, on the condition that the taxpayer can provide legitimate reasons.
Am I Eligible For An IRS Offer In Compromise?
An OIC is an excellent opportunity to settle federal tax debt for those who are eligible. It enables you to pay below the full amount of owed federal back taxes, potentially providing tremendous relief to those struggling to pay outstanding individual or business taxes. There are three conditions under which an offer in compromise may be filed:
Doubt As To Collectibility
If you owe a substantial amount in back federal taxes than you can feasibly pay, the IRS may settle for less than you owe. This process is known as an offer in compromise, doubt as to collectibility (OIC-DATC). When the IRS examines your financials to consider OIC-DATC, they are investigating whether there’s an uncertainty that they would be able to collect the entire amount they’re owed through standard collection methods.
The IRS’s final determination will depend on whether they believe they’ll be able to collect more of your back taxes through standard collection methods or an offer in compromise.
Doubt As To Liability
Doubt about liability pertains to the IRS deciding that your assessed liability is inaccurate. If your assessed tax obligation was too high based on a mistake, the IRS might approve you for an offer in compromise doubt as to liability.
You’ll have to provide evidence that there is a legitimate dispute regarding your federal tax obligation for eligibility. Then, the IRS will evaluate whether they approve.
Effective Tax Administration
If the IRS determines that collecting your full tax obligation would inflict economic hardship, they may consider permitting an offer in compromise for effective tax administration. To evaluate whether you’d face economic hardship due to paying your full tax liability, the IRS will closely assess your financial records.
Additional Requirements For OIC Eligibility
When the IRS investigates a taxpayer’s financial standing to decide whether they qualify for an OIC, they will consider these three qualifications and whether the taxpayer is up to date filing their tax returns, which is a requirement for eligibility of an OIC. A taxpayer is prohibited from an OIC if the IRS discovers they’re involved in any open bankruptcy procedures.
It can be challenging to tell if you are eligible for an IRS offer in compromise program. If you’re unsure whether you qualify, contact Morgan Sebastian Law, PC. Our attorney will examine your financial circumstances to verify whether you may be eligible and help you with the OIC application process and every step toward relieving your federal tax debt.
We Can Help With Your Offer In Compromise
Obtaining an offer in compromise from the IRS is no simple task. The approval process is often challenging and necessitates comprehensive records. As a result, we recommend taxpayers thinking about applying for an OIC to consult with an experienced tax professional.
At Morgan Sebastian Law, PC, our tax lawyer can help develop the optimal approach for your facts to get approved for an OIC while ensuring you supply the proper documentation to the IRS.
We help alleviate the stress that applying for this complex tax relief strategy often entails and provide qualified guidance for numerous federal and state tax challenges.