Offers in compromise delicate portions of tax law, not often used unless the amount of taxes the IRS assessed is impossible to repay within a reasonable amount of time. With effort, energy, and time, though, it is possible to successfully complete the paperwork and have your offer accepted, reducing the amount of taxes you owe to a more manageable number.
Processes behind Offers in Compromise
To file an acceptable offer in compromise by yourself is hard. It involves a level of attention to detail that can be hard to manage during an already stressful time. It is usually best to hire a professional tax attorney to help you successfully navigate tax laws and ensure that your offer is entirely legal. By hiring a tax attorney, you get an extra set of eyes to look over your forms for errors and omissions, increasing your odds of a successful offer in compromise. Even a minor error can seriously delay an IRS decision about your offer, and a more serious error can lead to an outright rejection of your offer in compromise.
Completing an Offer in Compromise
You have your professional tax help, and now you’re ready to fill out all of your paperwork. You’ll need everything you used when you filed your original taxes, as well as a complete list of your financial assets. You’ll also need to consult your tax attorney to determine what a reasonable offer in compromise would b for your specific income level and family status. While you’re doing that, you also need to figure out if a single lump-sum payment or multiple smaller payments would be better. If you owe a very large sum, and the offer in compromise will still leave it as a considerable amount, projecting several smaller payments can make your offer seem more realistic, and thus, more likely to be accepted.
After Completing Your Offer
Once you’ve filled out all of the forms for your offer in compromise, let your tax attorney look over it a final time to make sure that every necessary piece of information is included, and that everything is concise and logically put together for ease of comprehension. If your offer in compromise is confusingly-worded, it is more likely to be rejected, due to the lack of time the IRS has for individual requests.
By properly completing an offer in compromise and adhering to all applicable tax laws to ensure that it’s a fully legal document, your chances of an acceptance goes up substantially. Although it is not necessary, having a professional tax attorney look over all of the forms to catch any potentially-costly mistake can be the difference between an accepted offer and one that is rejected and must then be appealed. When dealing with tax laws, accuracy is paramount, and the smallest error can seriously affect your chances of submitting a successful offer in compromise, but if all the rules are followed you can find yourself with a much more reasonable figure to pay to the IRS.