An Offer In Compromise is a program offered by the Internal Revenue Service (IRS) that allows taxpayers to settle their tax debt for less than the full amount owed. This program is designed for individuals who are unable to pay their tax debt in full and can demonstrate financial hardship. The taxpayer must submit a detailed financial statement and provide supporting documentation to prove their inability to pay the full amount. If the IRS accepts the offer, the taxpayer will be required to make a lump sum payment or set up a payment plan to fulfil the agreed-upon amount.
An Offer in Compromise is a program offered by the IRS that allows taxpayers to settle their tax debt for less than the full amount owed.
Taxpayers who are unable to pay their tax debt in full and can demonstrate that paying the full amount would cause financial hardship may be eligible for an Offer in Compromise.
The amount you should offer in your Offer in Compromise depends on your financial situation, including your income, expenses, and assets. The IRS will consider these factors when evaluating your offer.
Yes, you can negotiate the terms of your Offer in Compromise with the IRS. However, it is important to provide accurate and complete information to support your offer.
If your Offer in Compromise is accepted, you will be required to make the agreed-upon payments and comply with all tax laws for a specified period of time. Once you fulfill these obligations, the remaining tax debt will be considered settled.
If your Offer in Compromise is rejected, you have the option to appeal the decision. It is advisable to consult with a tax professional or attorney to assist you with the appeals process.
Yes, you can still apply for an Offer in Compromise if you have filed for bankruptcy. However, there are additional requirements and considerations that may apply in these cases.
Yes, once you submit an Offer in Compromise, the IRS will generally suspend collection activities, including wage garnishments and bank levies, until a decision is made on your offer.
The IRS typically takes several months to review an Offer in Compromise. The exact timeframe can vary depending on the complexity of your case and the workload of the IRS.
Yes, you can make a lump sum payment for your Offer in Compromise. This is known as a cash offer and may be more appealing to the IRS as it provides immediate payment of the reduced tax debt.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 13th April 2024.
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