The Internal Revenue Service or IRS offers a special program to taxpayers who are incapable of paying off their entire tax debt, known as the offer in compromise. Under this program, you typically have the opportunity to negotiate a settlement with the IRS that is less than the amount you actually owe. However, you must also understand that the application and scrutinizing processes are very in-depth and lengthy. In fact, many IRS offer in compromise applications are often rejected, which is why most taxpayers opt for this program as a final alternative to settle tax debt. Aside from just knowing what the offer in compromise is, you also have to understand how it works and why enlisting the help of tax debt lawyers can give you a better chance at success.
How Do You Qualify?
There are very strict qualification requirements that deem you eligible for an offer in compromise, therefore not just “anyone” can apply. Because the offer in compromise program caters specifically to those who are unable to pay their IRS tax debt, in order to qualify, you must prove your inability to pay. How can you do this? Well, you have to verify to the IRS that paying your tax debt will in fact impose economic hardship upon you.
What constitutes economic hardship? In most offer in compromise cases, taxpayers cannot make payments due to their incapability of earning a living. The following can be some contributing factors of financial strain:
- Sudden illness
- Disability
- Rare medical conditions
- Liquidation of assets
It also helps your offer in compromise case if you can show the IRS that you have never had a problem filing and paying your taxes in the past, you have not intentionally tried to evade paying your taxes and you have not encouraged others not to file their taxes.
Tax Debt Lawyers
A lot of people fail to realize the importance of hiring a qualified tax debt lawyer to represent them in an offer in compromise case. Not only is it important, but it’s also vital to the successful outcome of the case. Several offer in compromise applications get rejected every year by the IRS as a result of poor representation. For this particular reason, seeking out an experienced tax debt lawyer is your best bet to winning your offer in compromise case.
There are also stringent rules and procedures that go along with applying for an offer in compromise. Therefore, if you aren’t knowledgeable about the various IRS tax laws, you can get into further trouble with your taxes and no one wants that! It’s also unfortunate, but sometimes taxpayers can be subjected to IRS tax errors, mistreatment and intimidation. This can result in you having to pay more than what you are liable for due to incorrect IRS proceedings or failing to enlist the assistance and support of a qualified tax service.
Tax debt is not the end of the world! There are certain options that will help you settle your IRS tax debt and one of them is the offer in compromise. However, bear in mind that you must meet the qualification conditions that apply in order to have an actual case. With the help and guidance of a qualified tax lawyer, you can make a successful offer in compromise settlement.