Are you behind on your IRS tax debt payments? If so, you might be wondering if there are any solutions on the table. One option you may not have considered yet is an Offer in Compromise.
In this article, we’ll explore what an Offer in Compromise is and how to apply for one. We’ll also discuss other options to consider when it comes to resolving tax debts.
So, read on!
Understanding the Requirements
To qualify for an OIC, the taxpayer must have filed all their required tax returns, have adequate income and assets to cover the proposed settlement and be in a financial position to pay the proposed settlement amount, either in a lump sum or in a payment plan.
Understanding the requirements of an OIC before submitting a proposal is critical since, if accepted, the taxpayer is obligated to make full payment of the accepted tax payments as agreed.
Knowing When an Offer in Compromise Is Appropriate
Knowing when an Offer in Compromise is appropriate is important for taxpayers to understand. If the facts and circumstances do not support the criteria for the OIC, the taxpayer may be wasting time and energy on an option that won’t be considered by the IRS.
Taxpayers should consult a knowledgeable tax professional to help determine if an Offer in Compromise to pay off taxes is the most suitable option.
Taking Advantage of Alternatives to an Offer in Compromise
Alternatives can be quicker to resolve tax debt. These include a Temporary Delay, which allows the taxpayer an extension on payment or restructuring of the debt, or an Installment Agreement.
These alternatives allow the taxpayer to make monthly payments to the IRS. Taxpayers should consider all alternatives before agreeing to an Offer in Compromise, as they may be a more viable option.
Taxpayers should also consult with a financial advisor, accountant, or tax debt attorney. This will ensure they are fully informed and make the best choice for their financial future.
Evaluating Pros and Cons of an Offer in Compromise
Pros of an OIC include reduced taxes, interest, and penalties. A taxpayer should also understand the cons of an OIC, such as the offer must be accepted by the IRS, it takes some time to complete, and a taxpayer must submit financial information.
Additionally, the IRS will normally require taxpayers to pay any future taxes due on time and in full to be eligible, and the OIC might not be accepted by the IRS. So, it is important to evaluate the pros and cons before deciding to use an OIC.
Learning More About an Offer in Compromise Today
An Offer in Compromise is a powerful tool to help taxpayers keep more of their hard-earned money. It can often help when taxpayers don’t have the financial ability to pay their IRS tax balance in full.
If you think you may qualify, contact a trusted tax professional to learn more and get started.
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