In order to stay compliant with tax laws, it is important for businesses to understand the ins and outs of offers-in-compromise. This process can be confusing, but our team is here to help. Here are the basics of offers-in-compromise and how they can benefit your business.
An offer-in-compromise is a process by which a taxpayer can negotiate with the IRS for a reduction in the amount of taxes owed. This process can be used to resolve tax debt that is owed by an individual or business. Our team is here to help.
Offers must be submitted in writing on IRS Form 656 and include a $300 application fee, as well as a non-refundable down payment towards the tax debt that is owed. If your offer is accepted by the IRS, you will still owe additional payments towards your tax debt.
The best offers are those that have been prepared by a tax professional who has experience negotiating with the IRS. Our team is here to help. We will work closely with you and your CPA/tax preparer so we can ensure that your offer is approved by the IRS and that you receive the best settlement possible.
Once an offer-in-compromise has been accepted by the IRS, we will work closely with you to ensure that all of your tax liabilities are paid on time and in full. Our team is here to help! We can also assist in negotiating payment plans or other IRS payment options so you can avoid liens, levies, and bank account seizures.
Three Categories of Offers In Compromise
There are three types of offers-in-compromise:
- Doubt as to Collectibility (Doubtful Collection)
Doubt as to collectibility means that the taxpayer has a genuine dispute with the IRS regarding how much they owe. For example, if you had previously filed a tax return and have not received any communication from the IRS about your debt for over three years, then this may be an appropriate offer for you to submit.
Doubt as to Liability (Doubtful Liability)
Doubt as to liability means that there is reasonable doubt that a taxpayer actually owes taxes at all or what was assessed by the IRS on their return(s). This type of offer can also be used when there are errors in calculations made by either party during negotiations. The best way to determine if this type of offer would apply in your situation is by consulting with us first so we can review.
Inability to Pay (Financial Hardship)
Inability to pay means that the taxpayer cannot afford to pay their full tax liability due to financial hardship. This can be applied when there are major changes in income, such as loss of job or business foreclosure.
Tax Compliance and Offers-In-Compromise
Our team is here to help you with your tax compliance needs. We will work closely with you so we can ensure that all of your liabilities have been paid on time and in full by using our system of filing returns electronically directly through IRS e-filing systems (or if necessary paper filing).
Get Compliant and Get Tax Relief
Morris and Associates are experts when it comes to helping individuals and companies find tax relief in Georgia but can help no matter where you live or whatever tax questions you have. Contact us to help with your taxes and possibly even reduce the amount that you owe.
