Offer in Compromise? Source:
http://www.irstaxattorney.com/ (Non-paid link)
An offer in compromise is an agreement between a taxpayer and the IRS that
resolves the taxpayer's tax debt. The IRS has the authority to settle, or
"compromise," federal tax liabilities by accepting less than full payment
under certain circumstances. A tax debt can be legally compromised for one
of the following reasons:
Doubt as to Liability - Doubt exists that
the assessed tax is correct.
Doubt as to Collectibility - Doubt exists that you could ever pay the full
amount of tax owed.
Effective Tax Administration - There is no doubt the tax is correct, and
no doubt that the amount owed could be collected, but an exceptional
circumstance exists that allows the IRS to consider a taxpayer's OIC. To
be eligible for a compromise on this basis, the taxpayer must demonstrate
that collection of the tax would create an economic hardship or would be
unfair and inequitable.
Taxpayers should beware of promoters'
claims that tax debts can be settled for "pennies on the dollar" through
the Offer in Compromise Program. Check the OIC requirements to see if an
offer in compromise is right for you.
|