Offer In Compromise
Get a Fresh Start with Tax Relief
Dealing with significant tax debt can be overwhelming, but an Offer in Compromise (OIC) offers a potential solution for those who cannot pay their full tax liability. This article will explore what an Offer in Compromise is, how to qualify for it, steps to prevent needing one, and how Priority Tax Relief can assist in the process.
What Is an Offer in Compromise?
An Offer in Compromise is a program provided by the IRS that allows taxpayers to settle their tax debt for less than the full amount owed. This option is available to those who cannot pay their tax debt in full or would face financial hardship if they did. The IRS considers several factors when evaluating an OIC application, including the taxpayer’s income, expenses, asset equity, and ability to pay.
How to Qualify for an Offer in Compromise
To qualify for an OIC, you must meet specific criteria and provide detailed financial information to the IRS. The key factors the IRS considers include:
- Ability to Pay: The IRS will review your income and assets to determine if you can pay the full amount.
- Income: Your current and future income potential is assessed.
- Expenses: Your necessary living expenses are considered to see if you can afford to pay the tax debt.
- Asset Equity: The IRS examines the equity in your assets, such as real estate, vehicles, and investments.
If the IRS determines that the amount offered is the most they can expect to collect within a reasonable period, they may accept the OIC.
How to Prevent the Need for an Offer in Compromise
Preventing the need for an OIC involves proactive tax management and compliance. Here are some strategies to avoid falling into significant tax debt:
- File and Pay Taxes on Time: Ensure that you file all required tax returns and pay any taxes owed by the due date to avoid accumulating tax debt.
- Set Up a Payment Plan Early: If you cannot pay your tax debt in full, contact the IRS to set up an installment agreement as soon as possible.
- Maintain Accurate Records: Keep accurate and up-to-date financial records to ensure that your tax filings are correct and timely.
- Budget for Taxes: Set aside funds throughout the year to cover your tax liabilities and avoid financial strain when taxes are due.
- Stay Informed: Keep up-to-date with changes in tax laws and regulations to ensure compliance.
- Seek Professional Help: Consult a tax professional or accountant to help manage your tax obligations and avoid falling behind.
How Priority Tax Relief Can Help With Offer In Compromise?
Priority Tax Relief is a tax resolution service that assists taxpayers in resolving complex tax issues, including Offers in Compromise. Here’s how we can help:
- Expert Consultation: We provide expert consultation to assess your tax situation and determine if an OIC is the right option for you.
- Application Preparation: Priority Tax Relief can help you prepare and submit the OIC application, ensuring all necessary documentation is included and accurately completed.
- Negotiation with the IRS: We negotiate with the IRS on your behalf to increase the chances of your OIC being accepted.
- Financial Analysis: We conduct a thorough financial analysis to present the best possible offer to the IRS based on your ability to pay.
- Guidance and Support: We offer ongoing guidance and support throughout the OIC process and help you implement strategies to avoid future tax issues.
Contact Priority Tax Relief at 888-708-2872 to learn more about Offer In Compromise and schedule a consultation.
Cancellation: Any cancellation of services must be made in writing and delivered to 400 S. Jefferson, Suite 100, Spokane, WA 99204 within three business days of the date of this agreement. If the client cancels services during this time, Company, reserves the right in its sole discretion to convert the agreed fee payment structure to an hourly one by which Client agrees to pay Company an hourly rate of five hundred fifty dollars an hour, entitling Client to a refund of up to fifty percent of all monies paid beyond the ten day money back guarantee in cases where no aggressive collection action is in place.
Frequently Asked Questions: Offer In Compromise
What is an Offer in Compromise (OIC)?
An Offer in Compromise (OIC) is a program provided by the IRS that allows taxpayers to settle their tax debt for less than the full amount owed. It is an option for those who cannot pay their tax liability in full or would face financial hardship if they did.
How do I qualify for an Offer in Compromise?
To qualify for an OIC, you must meet specific criteria and provide detailed financial information to the IRS. The IRS considers your ability to pay, income, expenses, and asset equity when evaluating your application.
What are the key factors the IRS considers for an OIC?
The IRS considers your ability to pay, current and future income potential, necessary living expenses, and the equity in your assets when evaluating an OIC application.
How long does the OIC process take?
The OIC process can take several months to a year or more, depending on the complexity of your financial situation and the IRS’s workload. The IRS will notify you of their decision in writing.
What happens if my OIC is accepted?
If your OIC is accepted, you must comply with all terms of the agreement, which may include paying the agreed-upon amount in a lump sum or through installment payments. Once the terms are met, the IRS will release any tax liens.
Can I apply for an OIC if I am currently in bankruptcy?
No, the IRS will not accept an OIC if you are currently in an open bankruptcy proceeding. You must wait until the bankruptcy is discharged or dismissed before applying for an OIC.
What are the benefits of using Priority Tax Relief for an OIC?
Priority Tax Relief can provide expert consultation, assist in preparing and submitting the OIC application, negotiate with the IRS on your behalf, conduct a thorough financial analysis, and offer ongoing guidance and support throughout the process.
What happens if my OIC is rejected?
If your OIC is rejected, you have the right to appeal the decision within 30 days using IRS Form 13711 (Request for Appeal of Offer in Compromise). Priority Tax Relief can help you understand the reasons for the rejection and assist in filing an appeal if necessary.