Scenario: you receive a tax bill from the Internal Revenue Service (IRS) for a staggering amount. You think to yourself: how am I ever going to be able to pay this AND all my other bills? Do I have to sell my car … my house …?
Several people have had to tackle this struggle. You are not the only one. That may bring some comfort … for a moment at least. Fortunately, there are some other alternatives available for people in your situation. These are known as tax resolution options. This is what Bullseye Tax Relief specializes in. We will discuss each of them, one at a time. The first one we will discuss in an Offer in Compromise. So, what is it?
An Offer in Compromise (also known as OIC) allows you the option to settle your tax debt for less than the amount you owe the IRS. It was created for those taxpayers who could not pay their tax debt in full without experiencing a resulting financial hardship. Depending upon your financial situation, it may be impossible for you to pay your tax debt in full, even with the aid of an installment plan or other tax resolution option. An Offer in Compromise is extremely helpful to those with the severe inability to pay off a tax debt. You can pay your tax debt off completely by negotiating an amount with the IRS. This amount can be exponentially smaller, and your slate is “wiped clean” by the IRS, giving you a fresh start.
To qualify for an Offer in Compromise, you must first submit the proper forms to the IRS. The amount you offer them must meet their specific set of rules and considerations. There are three different situations that make you eligible for an Offer in Compromise:
- Doubt as to Collectability: This is the most commonly used OIC. The full amount of the tax debt may not be collectable for people whose assets and income are less than the amount of tax debt owed to the IRS. For this reason, these taxpayers can settle their account for an amount that is less than the full amount due. The IRS must approve any offer first.
- Doubt as to Liability: Here, taxpayers are questioning the amount of tax debt in part or in full. Perhaps, they feel that an error is to blame for the larger amount.
- Effective Tax Administration: With this type, the full amount of the tax debt is not in question. They owe the amount, period. They can also pay the full amount. However, by paying the full amount of the tax debt, a financial hardship results for the taxpayer.
As you can see, an Offer in Compromise is definitely a tax resolution tool. This tool can be used for employment tax resolution for businesses. If you receive a tax bill that you cannot afford, please contact us immediately so that we can help with your tax problem. Consultation is free!
Our following blogs will discuss the eligibility and process of an Offer in Compromise so please visit us again.