IRS Tax Offer in Compromise

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An Offer in Compromise is a provision in the tax code that permits you to pay less than the aggregate of your tax debts under certain conditions. There is a strict qualification process in place, however, so not everyone will qualify. If you are thinking of applying for an Offer in Compromise, the first prerequisite is responding to any and all IRS mailings and phone calls promptly and with the proper respect. Failure to do so will essentially eliminate you from any kind of deal that the IRS may consider offering. To learn more about an Offer in Compromise Florida, keep reading.  Click here to read or watch more IRS Help resources.

If you are thinking of applying for an Offer in Compromise, the first prerequisite is responding to any and all IRS mailings and phone calls promptly and with the proper respect. Failure to do so will essentially eliminate you from any kind of deal that the IRS may consider offering. To learn more about an Offer in Compromise Florida, keep reading.  Click here to watch or read more information on IRS Back Taxes.

Upon receiving your application, the initial step taken by the IRS would be to evaluate how much you can reasonably pay based on your income. If they believe you can pay off your tax debt, albeit progressively, it is extremely unlikely that a deal will be cut. But if it is clear to the IRS that you have no ability to pay that much, then you stand a chance of your application being approved. The uniqueness for those under Florida law is that your responsibilities in taking care of older family members can be taken into account in determining your ability to pay taxes.

There are basically three kinds of Offers in Compromise. The first is where you are not able to pay off your tax debt before the deadline. For instance, if you owe $30,000 in back taxes but only earn $25,000 a year with three months left to pay, you can quite justifiably apply for an Offer in Compromise. The IRS will likely allow you to pay a certain percentage of the $30,000 and forgive you of the rest. This would be more expedient than not to be able to collect anything at all.

There is another kind of Offer in Compromise where the amount of debt you owe is miscalculated or some part of the debt is actually not rightfully yours to bear. If it can be shown that you really do not owe as much as they say you do due to a miscalculation or mix-up in identity, you will be allowed to pay only what is your rightful liability. This is the toughest of the three things to prove, but if you are positive this entire situation was one big mistake, then this is the type of offer you should try for.

The third kind of Offer in Compromise is where you are not able to pay your tax debt due to economic hardship. If you can prove that settling your debt would endanger your ability to pay for basic needs like food, clothing, medication and shelter, you may be able to pay less. Not every economic hardship qualifies, however. Only very basic economic needs are taken into consideration; in just about any other case, you won’t get an Offer in Compromise. Florida residents should note that caring for elderly family members can be considered as part of your offer. That is one of the things that makes the Florida tax law different from most other states.

 

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