Settle for Pennies on the Dollar: Your Guide to IRS Offer in Compromise
An offer in compromise gives you an opportunity to pay your tax debt for less than what you owe the Internal Revenue Service (IRS). In other words, OIC is a form of tax relief that anyone with unsatisfied tax debt can apply.
The best way to increase your chances of getting the relief, you need to hire an experienced collection lawyer Atlanta Georgia.
Who can apply for an offer in compromise and how is it approved?
Anybody who can prove or provide legitimate reasons why they are unable to pay tax is eligible to apply for an offer in compromise. The IRS will consider each unique case based on a set of facts and circumstances that include:
- Household income
- Ability to pay
- Assets and equity
The Internal Revenue Service normally approves an offer in compromise if the amount presented represents the most they can expect to collect within a specific period of time. It is always advisable to explore other options of payment before applying for an offer in compromise.
One of the first things you should do before applying for an offer in compromise is to talk to collection lawyers in GA to find out if you are eligible or not.
This is because the IRS will automatically return or reject any offer in compromise (OIC) application of someone who hasn’t filed their tax returns or hasn’t made any estimated payments.
Prequalification for Offer in Compromise
This is a self-assessment approach meant to ensure only individuals who meet the IRS threshold can apply for an offer in compromise.
Below are IRS pre-qualifiers that normally disqualify many people from receiving an offer in compromise:
- In case you have an open bankruptcy proceeding
- If you haven’t filed any mandatory federal tax returns
- If you have failed to make the required estimated tax payments
Sometimes you might not be aware of mandatory tax returns. That’s why it is important to engage Atlanta collection attorneys to understand all your tax obligations. Lawyers understand how tax laws work and they will be able to advise you accordingly as far as the eligibility for an offer of compromise is concerned.
Filling for tax relief via an offer of compromise
After talking to IRS collections attorneys, you should be able to determine whether you are eligible or not for an offer in compromise. If you are eligible, the next step is to submit your application to the respective IRS offices for review and consideration.
The application process usually involves the use of an offer in compromise booklet known as IRS Form-656. A complete offer in compromise application should have the following:
- Applications fee of $205
- Form 656 (for personal tax debt)
- A payment accompanied with different forms 656
- For 656 for business tax
- Documentation and any evidence requested by form 433-A
Selecting your payment option
Your first payment will be different depending on the payment options you select:
Periodic payments: This is where you continue paying your tax debt through monthly installment after submitting your initial application and being accepted. You will continue with the payment until it’s fully paid.
Lump-sum payment: This is where you are required to submit a payment of at least 20 percent of the total amount offered. You will be issued a confirmation letter if the IRS approves your offer in compromise application.
How a lawyer can help
An offer in compromise is a great way of saving money because you pay less than what you are normally supposed to pay.
The best way to have your application approved is by hiring a qualified IRS collections attorney Atlanta. The Law Office of Max Benkel has some of the best IRS collection lawyers in the country.