While the Internal Revenue Service (IRS) is not known for being particularly forgiving, there are times when the government will acknowledge that a reduction in a person’s tax liability is the best option. This is accomplished through something known as an offer in compromise (OIC). An experienced IRS collection attorney could determine if you are eligible for an OIC and assist you in getting it approved.
If you are facing overwhelming tax debt, an offer in compromise might be the most efficient way to resolve that issue. Just because an offer in compromise would be the most beneficial option to you does not guarantee that the IRS will agree to reduce your tax liability. Let a Washington DC offer in compromise lawyer help you determine if you are entitled to relief.
An offer in compromise is an opportunity to resolve a tax debt with the IRS for less than the full amount owed. This option is not available to every taxpayer and most requests for an offer in compromise are denied. However, a Washington DC attorney could evaluate when an offer in compromise might be a viable option in a particular situation.
There are different ways that a taxpayer could benefit from an offer in compromise. In some cases, the IRS will agree to accept a lump sum payment. This serves as a down payment that is typically followed by up to five additional payments. In other situations, the IRS could accept periodic payments without the initial lump sum.
The IRS will not suggest an offer in compromise to a taxpayer on their own volition. To secure an offer in compromise, a taxpayer must submit a formal application to the IRS for the federal government to even consider it. There is also an application fee that must be paid.
There are several things that happen if an offer in compromise is accepted by the IRS. The IRS will keep any refund from prior years through the year of the accepted offer in compromise. These refunds are not considered as payment of the offer. Once the terms of the offer in compromise are completely satisfied, the federal government will release any remaining tax liens.
There are only a few situations where a taxpayer will be eligible for an offer in compromise. An offer in compromise attorney in Washington DC could provide guidance on whether someone fits these qualifications. In total, there are three situations that could lead the IRS to accept an offer in compromise.
First, the IRS could accept an offer in compromise if it determines that collecting the debt without the compromise is unlikely. This is only a viable option when the IRS determines that a taxpayer’s current or future income is unlikely to result in repayment.
Second, an offer in compromise could be accepted if there is a dispute on the amount owed. If a taxpayer has a valid dispute over the amount of their tax debt, the government might agree to resolve it using an OIC.
Finally, the IRS could agree to accept an offer in compromise for the purposes of advancement of effective tax administration. This reason is typically for exceptional circumstances that are more about benefiting the IRS than the taxpayer.
If you are wrestling with a large tax burden, an offer in compromise could be your best option for moving forward. Your application is never guaranteed to be successful but the right attorney could help improve your chances. Place a call or fill out an online form and let a Washington DC offer in compromise lawyer guide you through this process.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Vienna, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.