Can An Offer In Compromise Help You With Tax Debt Settlement

Many times taxpayers find themselves overburdened by accumulated back taxes. They are willing to be free of back taxes by paying what they can afford. The IRS understands this and has a program called the OIC – offer in compromise for tax debt settlement. To avail this benefit, the IRS should be convinced that the taxpayer is unable to pay off his tax debt in full. The IRS considers it more prudent to defer more penalties and interest and does not expect the taxpayer to pay the full amount. Instead, the IRS decides to settle tax debt through an offer in compromise. LoansStore IRS tax debt professionals network provide IRS tax debt help for their clients by successfully negotiating with the IRS on their behalf and helping them file back taxes.

The convenience of free tax debt help to settle a tax debt through an offer in compromise is given to only those who qualify for it and is not meant for everyone. An OIC is a program the IRS offers to taxpayers unable to pay tax debt. Qualifying taxpayers are allowed to pay a lesser amount than what is owed. The offer in compromise program is for effective tax administration to allow taxpayers with considerable back taxes to clear up their tax debt and start afresh to stay current with taxes in the future.

An offer in compromise is considered to qualify, if a taxpayer falls into at least one of the three groups.

1. Uncertain Liability
2. Uncertain Collectability
3. Economic Hardship

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IRS tax debt help when tax is really not owed. There is reason for doubt that the assessed tax liability is correct. An existing doubt in liability means the examiner either made a mistake, failed to consider the taxpayer’s evidence or, the taxpayer has new evidence.

The taxpayer may have no way to pay his debt. If there is a doubt that the tax payer does not have the income, assets, or means to pay tax liability now or in the foreseeable future and cannot pay the remaining amount. Taxpayer proves that that the collection of the tax debt would be unfair or create further hardship because they have special justifying circumstances in the family. A case of having a sick child requiring long-term treatment where the taxpayer needs to use the equity in assets for basic living expenses and medical care for the child is granted an offer in compromise.

The different schemes for an offer in compromise to enable a consumer to pay his tax are:

1. The lump sum payment
2. Structured short term periodic payments and
3. Deferred periodic payment.

Selecting the appropriate tax settlement service depends upon your financial capabilities. Paying in lump sums can help you settle for much less than what you owe. If you choose a periodic payment scheme you can pay in either 5 months, less than 24 months or if more time is required then within the statutory period.

To prevent tax debts you may use software packages to maintain your accounts. It will account your expenses and the relevant sums of your business capital. Of course, a tax payer must pay the assessed tax to avoid tax debts. Keeping track of tax expenses a consumer can always have ample time to arrange for the cash to pay his taxes on time.