As a taxpayer, you may find yourself in a position where you owe a tax debt to the Internal Revenue Service (IRS), but are unable to pay it. This is an extremely stressful and overwhelming situation. Fortunately, however, there are various alternative solutions available to you that could bring financial relief. One such solution is known as an offer in compromise. The taxpayer and the IRS agree upon a lesser amount that the taxpayer owes on the total tax debt when the taxpayer demonstrates an inability to pay.
Seven Things You Need to Know About Offers in Compromise
Does an offer in compromise sound like the right solution for your tax situation? As with anything involving taxes, it is not necessarily a simple process. There are many things to be aware of as you move forward, including the following:
- Penalties and interest continue to accrue while the IRS evaluates your offer.
- After filing the offer, you must continue to file and pay all required tax returns and estimated tax payments. This is true through the date of the final decision on your offer and, if it is accepted, through the fifth year of compliance.
- Offers cannot be submitted for tax years or tax periods that have not yet been assessed. Instead, wait until you receive at least one bill for your tax debt.
- Offers cannot be submitted if the IRS refers a case to the Department of Justice.
- Understand that certain information about an accepted offer may be made available for public inspection and review. This is required by law.
- The IRS can levy your assets at any time up until an IRS official signs and acknowledges that your offer is pending. This includes many of your most valuable possessions, including, for example, your family’s home in Tulsa, Oklahoma City, or Norman.
- When you submit an offer, you can stop making payments under any installment agreement that you have with the IRS.
Discuss Your Tax Issue With An Attorney, Call us Today!
An experienced tax attorney can help you determine whether an Offer in Compromise may be a good solution for your tax debt problem, and will also be able to guide you though the application process in a way that gives you the best possible chance for a successful offer. For a free, no-obligation analysis of your tax situation, give us a call today at 800-721-7054.