When you cannot pay your taxes in full to the IRS due to an unavoidable reason you can seek a tax settlement alternative where you pay less than the total tax owed. An IRS offer in compromise is an agreement in which you pay less than the amount owed and the IRS wipes out the rest of the taxes owed. Let’s discuss why taking an attorney’s help for IRS offers in compromise can make your life less stressful.
Scenarios where IRS Offers in Compromise is Approved
Requesting an IRS offer in compromise to settle a tax due is very beneficial for taxpayers. It helps save thousands of dollars on the total tax liability, but there are only three scenarios under which it is approved:
- Doubt as to liability: If you think the IRS has made a mistake in the liability amount you can file an offer in compromise with “doubt as to liability”. The approval rate is low as it is hard to prove but it does happen sometime. Getting a tax debt attorney to file the papers for you can be a good idea.
- Doubt in collecting the taxes: When the IRS reviews the financial situation of a taxpayer and finds the due amount cannot be recovered in full, they may accept an offer for a lower tax debt settlement through an IRS tax installment agreement in which you can make partial payments monthly for the duration of the tax liability. The offer in compromise to the IRS should be at least more than they could collect through tax levies and liens.
- Harsh Financial conditions: Under exceptional circumstances in which the collection of the full tax amount owed could cause financial hardship in the present or foreseeable future and can be unfair for the taxpayer, the IRS may settle tax dues by offer in compromise. These exceptional circumstances can be bad family conditions, long-term medical complications of the taxpayer, any handicap due to accidents which led to no work or if the taxpayer is above 60 yrs of age and has fallen behind in payments.
It is difficult to get the IRS to agree to an offer in compromise and it requires a lot of paperwork. The approval time could be anywhere between 12 to 24 months and still 40% of the offers get rejected. Some tips for IRS offers in compromise requests are that you must file all financial records correctly, the amount should be more than the IRS would get in any other situation and staying up-to-date with IRS policies.
Why Hiring a Tax Attorney is Important
Although beneficial, IRS offers in compromise agreements can be complex, so getting an experienced IRS tax attorney in your area is necessary to increase your success rate and minimize hassles. If you need professional IRS debt help in Dallas, look for an attorney with experience in IRS debt relief services like IRS penalty abatement and offer in compromise. Hire someone who has knowledge about your state laws. Look for a Dallas tax attorney who can understand your unique situation and come up with a proposal custom to you while understanding the intricacies of the IRS offer in compromise agreement. And of course, book a free consultation to find out whether an IRS offer in compromise really is the best solution for you.
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