Setting Up An Offer In Compromise To Address Unpaid Taxes
Despite its continued use and nonstop advertising, an offer in compromise is not the solution to every tax problem. An offer in compromise takes careful planning and coordination. Certain persons will not qualify. Even if you do qualify, you may have other options.
You need a tax attorney with experience in offers in compromise who can handle the complexities of this tax-saving device. You will find one at the Law Offices of Robert T. Leonard, APC. Based in Westlake Village, he represents individuals and businesses in Orange, Ventura, San Bernardino and Riverside counties, as well as other communities across the country. Depending on the facts of your case, attorney Robert T. Leonard can set up an offer in compromise which may work now, or one that may work after a short time, for example, in three months from now.
All About Offers In Compromise
The offer in compromise (OIC) program is an IRS initiative that allows eligible taxpayers to settle their unpaid tax debts for less than the full amount owed. This program is designed to provide relief to individuals who are unable to pay their tax liabilities in full due to financial hardship. To qualify, taxpayers must demonstrate their inability to pay the full debt, considering their income, expenses and asset equity.
An offer in compromise can be utilized to negotiate the amount of taxes, interest, and penalties owed. The same rules that govern individuals applying for an offer in compromise also apply to businesses seeking one. Acceptance of an offer in compromise depends on the individual or business remaining up-to-date with their taxes for a specified period.
The Importance Of An Offer In Compromise Lawyer
Having a lawyer for any issue related to the IRS is crucial. An OIC attorney can provide advice throughout the process. They ensure that all documentation is accurate and on time. They can also negotiate with the IRS on your behalf, increasing the likelihood of a successful outcome. A lawyer can help you understand the terms of the OIC and protect your rights, avoiding potential pitfalls and long-term consequences.
Sometimes, an offer in compromise attorney can coordinate dual federal and state offers in compromise. The filing of dual offers is an easier process if there are no assets. However, if a taxpayer does have assets, the situation is much more complicated. Cash or liquid assets may need to be deposited with the offer in compromise. There is less certainty in submitting an offer in compromise than in bankruptcy. However, when offers in compromise are accepted, they can provide large tax savings.
Attorney Robert T. Leonard can assist clients by evaluating their eligibility, preparing necessary documentation, and negotiating with the IRS to achieve a favorable settlement. His knowledge ensures a thorough and strategic approach to resolving tax debt issues. If needed, he can represent you during an OIC appeal.
What Factors Can Affect My Offer In Compromise?
Factors that affect offers in compromise include the nature of your problem and whether your problem is isolated or recurring. Certain questions must be answered, such as whether you are in current compliance. Also, do you have the type of taxes that are dischargeable in a bankruptcy? Even the IRS Manual recognizes the value of the threat of bankruptcy during a pending offer in compromise.
Your medical condition, age, ongoing marital problems and unemployment can affect the chances of your offer being accepted. You will need to provide transcripts to demonstrate your current liabilities and financial statements. Supporting documents need to be submitted with your offer in compromise. Your tax attorney needs to know the approximate amount of your assets.
The quality of results can depend on the level of your income. We have obtained excellent results for persons with low incomes. Moreover, we understand that high-income individuals need additional considerations to give their offer in compromise a better chance of being accepted.
Responding To Your Questions About Offers In Compromise
We understand that navigating tax issues can be complex. To help clarify some common points, we’ve compiled a list of frequently asked questions. Below, we address some points about the offer in compromise to help you understand its purpose, eligibility criteria, and the process involved.
What is the purpose of an offer in compromise?
An offer in compromise is designed to provide taxpayers with a viable option to resolve their outstanding taxes when they are unable to pay in full. The primary purpose of an OIC is to allow taxpayers to settle their tax liabilities for less than what they owe, based on their financial situation. This program aims to ensure that taxpayers can meet their obligations without facing undue hardship, while also enabling the IRS to collect a portion of the debt that might otherwise remain unpaid. By accepting an OIC, the IRS can efficiently manage tax collections and provide relief to those genuinely unable to pay.
Who qualifies for an offer in compromise?
Eligibility for an offer in compromise is determined by several factors, including:
- Income
- Expenses
- Asset equity
- Ability to pay
Generally, individuals or businesses who can show that they cannot afford to pay their full tax debt due to financial constraints may qualify for an OIC. The IRS evaluates each application on a case-by-case basis. They consider whether the offered amount reflects the taxpayer’s maximum ability to pay. Note that not everyone will qualify; applicants must provide detailed financial information to support their request.
How long does the offer in compromise process take?
The offer in compromise process can vary in duration, typically taking several months to complete. Once an application is submitted, the IRS reviews the financial information provided and assesses the taxpayer’s eligibility. This review process can take anywhere from six months to a year, depending on the complexity of the case and the completeness of the documentation submitted. During this time, the IRS may request additional information or clarification, which can extend the timeline. Applicants should be patient and responsive to any IRS inquiries to facilitate a smoother process.
Contact An Offer In Compromise Attorney To Learn Your Options
If you owe money to the IRS and need a tax attorney, call Robert T. Leonard directly at the Law Offices of Robert T. Leonard, APC, at 818-485-2115. You can also fill out the online form on this website for a free, confidential initial consultation. We will review your case and your options with their respective benefits and drawbacks, and any alternatives to the legal process that you may have. We accept credit cards.