Many taxpayers face certain situations or circumstances wherein they are unable to pay off their tax debts. In such cases, the IRS has a number of tax debt relief options. One such option is an Offer in Compromise (OIC), which is an agreement between a taxpayer and the IRS that allows the taxpayer to settle any tax liabilities for an amount lesser than the actual unpaid amount. If you owe a large sum of money to the IRS and do not have the means to pay the amount in full, you can always request an Offer in Compromise to settle your tax debt. To help, in this blog post, we present five tips to follow when applying for IRS Offer in Compromise.
1. File Your Tax Returns Regularly
The most important condition the IRS expects every taxpayer to follow is to regularly file their tax return. It is essential for taxpayers to file their taxes, on time, for the next 5 years to be eligible to apply for an OIC. If taxpayers fail to do so, the IRS has the authority to revoke the OIC and reinstate the tax debt. It is, therefore, essential to file your tax returns regularly.
2. Check Your Eligibility
Before you go ahead and apply for an OIC, it is essential to check the eligibility criteria. Taxpayers with too much equity, any open bankruptcy, or any other disposable assets may not be eligible to apply for an OIC. It is, therefore, important to consult an IRS tax lawyer who can help you determine your eligibility for an OIC.
3. Have a Just Cause
The most important aspect an IRS offers in compromise application is the reason that prevented you from paying the tax debt in full. It is essential to be honest in your application and give a just cause. In addition, you are also required to give adequate proof to support your claim. A few good reasons wherein your OIC may be accepted include substance abuse issues, disability, and serious health issues.
4. Make Timely Payments
After your OIC application is accepted, it is essential to pay all the installments on time. Defaulting on your payments may result in high penalties or, in some cases, the IRS may choose to revoke the offers in compromise deal. Keep a reminder on your phone and never miss any payment.
5. Seek Professional Help
Although you can use the DIY route to apply for an IRS offers in compromise, it is advisable to seek professional help and let an IRS tax expert take control. IRS tax lawyers can not only help you with some great IRS Offer in Compromise tips, but will also guide you throughout the process, saving you from various hassles and confusions.
Whether filing for an Offer in Compromise or appealing to a rejected offer, it is advisable to seek the help of an IRS tax attorney who can guide you in the right direction. We, at the Law Offices of Nick Nemeth, have a team of experienced IRS tax lawyers who practice exclusively in dealing with all sorts of IRS tax related issues and provisions, including IRS Offers in Compromise. For a confidential, no-obligation consultation, simply call (972) 627-4580 or fill out our contact form and we will get back to you, shortly.