As we discuss in our previous blog posts in the Tax Resolution Services series, there are a variety of tax resolution services available to individuals and businesses that can help them to settle the amount they owe to the IRS – and some for less than the original amount. Offer in Compromise, like the Partial Installment Payment Agreement, which we’ll discuss in an upcoming blog post, is one of those options. There are also options like the Installment Agreement, which we’ll also discuss in an upcoming post, that allows individuals to pay back their debt in installments, rather than in one lump sum.
Like we mentioned in our previous post, Tax Resolution Services: Offer in Compromise Requirements, there may be some requirements or prerequisites an individual or business must meet in order to qualify for some of these tax resolution options. In most cases, if you’re looking to take advantage of one of these tax resolution options, it’s recommended that you seek out the assistance of a tax resolution specialist, like Bullseye Tax Relief. Negotiating with the IRS can be a tricky ordeal, and it’s best to be fully prepared.
Offer in Compromise
If you meet the requirements we shared in the previous post, meaning that according to the IRS’s standards, paying back the tax debt would place you in financial hardship and your financial situation is essentially otherwise in order – tax returns are filed, all required tax payments have been made, there are no current bankruptcy cases, etc. – then you may begin to take the steps to negotiate an Offer in Compromise.
To see a full list of the Offer in Compromise requirements, see our previous blog post, Tax Resolution Services: Offer in Compromise Requirements, or view our Offer in Compromise Page.
To begin the Offer in Compromise process, contact our team of tax resolution specialists today at (844) 582-3323 or firstname.lastname@example.org.
Types of Offer in Compromise
Depending on the specifics of your financial situation, there are three different types of Offer in Compromise available:
Offer in Compromise: Doubt as to Collectability
Doubt as to Collectability is the most common form of Offer in Compromise. Doubt as to Collectability applies to individuals or businesses whose earnings and assets amount to less than the total amount of the tax debt owed to the IRS. Because in most cases this would clearly cause financial hardship, the IRS is likely to conclude that the full amount may not be collectable and then choose to settle for less than the full amount owed.
Offer in Compromise: Doubt as to Liability
Doubt as to Liability is another form of Offer in Compromise and applies in situations where the individual or business would like to contest the debt owed to the IRS. Whether an individual or business believes that all or part of the tax debt owed is in error, Doubt as to Liability may be an option for them.
Offer in Compromise: Effective Tax Administration
Effective Tax Administration is the last form of Offer in Compromise. Effective Tax Administration applies to individuals or businesses who accept that they owe the tax debt without any doubt and are able to pay off the full amount owed, but doing so would likely result in financial hardship.
Depending on the specific situation of you or your business’s finances, Offer in Compromise may be a potential option that would allow you to escape the collection activities of and the growing debt to the IRS without having to pay back the full amount.
In our next blog post, Tax Resolution Services: Partial Payment Installment Agreement, we’ll discuss the Partial Payment Installment Agreement tax resolution solution and how it can help to potentially lower the total amount owed to the IRS.