An IRS tax lawyer helps you to settle a tax liability by facilitating an agreement with the government, and may also get you a waiver on the total outstanding amount. This is usually implemented when the possibility of being able to collect the entire tax liability seems bleak. In such cases, the government tries to extract what is easily collectible, at the earliest possible time and incurring the least costs associated with the recovery process.
Qualification for an Offer in Compromise
Although an IRS lawyer is the best person to tell you whether or not your issue qualifies for an Offer in Compromise, we are going to discuss a list that can help you better understand the criteria to which an offer in compromise may be extended to a taxpayer.
Doubt as to Liability
If a taxpayer disagrees or has doubts about the accuracy of a tax debt, they may may file for an Offer in Compromise. Usually taxpayers file for an Offer in Compromise under this category when they have a valid reason for the reduction or removal of penalties charged by the IRS or believed that the IRS charged them additional interest because of some internal error.
Doubt as to Collectibility
A doubt as to collectibility offer is filed when the taxpayer agrees to owing the taxes but shows an inability to pay the tax debt in full. Under such circumstances, the IRS may considering your request and give you an offer to pay an amount lesser than what you actually owe. In such cases, the government’s objective is to collect an amount that’s reasonable and easily collectible.
Effective Tax Administration
In case the taxpayer is ineligible for an offer in compromise based on Doubt as to Collectibility or Doubt as to Liability,they can still file for an offer in compromise under the Effective Tax Administration head. The IRS may approve the claim if it believes that paying the tax debt may cause the taxpayer economic hardships. In order to avoid this, the IRS may either allow the taxpayer to make partial payment or pay as per a short or long term deferred payment plan.
A Word of Advice
Hiring a tax lawyer is one of the best ways to minimize chances of your application getting rejected because they are aware of the intricacies involved. Tax lawyers also help their clients save a lot of money in addition making the process hassle free.
