An Offer in Compromise is an agreement between Tax Payer and the IRS or State that closes the tax debt for less than the amount owed.
The IRS offers this leniency program for people who cannot pay their tax debt in full, have exhausted all payment options available, and the IRS has doubt whether you could ever pay the full amount owed, or there is legitimate doubt that the liability is correct.
The Offer in Compromise cost will represent an amount and a time period for payment that is realistic. The ultimate goal for the IRS is to collect as much of the tax debt as possible, as quickly as possible, and with the least cost to the IRS.
It’s important that the taxpayer is aware that she may have several options of tax reduction available when using the Offer in Compromise strategy.
There are a few areas which will need to cover in order to use the Offer in Compromise strategy:
The taxpayer is unable to work to earn a living due to long term illness, injury, medical conditions, and disability. Although the taxpayer has the money to pay back the tax that is owed, the taxpayer will not be able to earn more money as a result of the previously stated reasons.
The taxpayer may have dependents that require financial support. If paying the full tax amount in question jeopardizes the health or care of dependents, this may be used as a valid reason for tax reduction.
If the taxpayer has assets and equity but is unable to borrow against them or is unable to liquidate any assets, it may also give the taxpayer grounds for a tax reduction, as the tax payer would struggle to pay for her basic living expenses.
Should you qualify for this program, we will gather all the appropriate information on your behalf, including the determination of the actual debt. Then we will prepare and submit for the IRS to review. Should the Offer in Compromise be accepted, Tax Relief Providers, may be able to help you save thousands of dollars in taxes, penalties.
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