IRS Options to Resolve Your Tax Problem

IRS Options to Resolve Your Tax Problem

Offer In Compromise

Put simply, an OIC allows you to pay a lower percentage of your taxes by making a compelling argument to the IRS that you lack the funds necessary to repay the full amount you owe.
The IRS may frequently agree to settle your tax liability at a reduced cost if you can demonstrate that you are unable to pay off your debt in a reasonable manner. For instance, an OIC may permit you to pay as little as $3,000 toward a $28,000 tax liability, with the remaining balance being deemed paid in full.

How to Qualify

The IRS considers certain conditions when reviewing your application to determine your eligibility for an OIC.

First, if the IRS finds there is a reasonable doubt as to whether you will be able to pay your payment. Usually, this is the case when your income is too low, or your assets aren’t valuable enough to be sold for enough money to pay off the obligation.

The second is if you can prove to the IRS that it would be financially difficult for you to pay the entire tax due.

The third scenario involves asserting that the amount owed to the IRS is inaccurate. This is the least common choice and requires another form to be filled out.

The IRS modified the regulations pertaining to OICs in 2012. Previously, settlement amounts were calculated by multiplying your monthly income by 48 months.  Currently, you only multiply your monthly disposable income by 12 months, so all you have to pay is 25% of what you would have paid otherwise.

In other words, your payment would be less if you applied for an OIC now than it would have been in the past.

To be eligible for an OIC, you must have.

• Filed all returns – current and unfiled tax returns.
• Submitted all requested information to the IRS.
• Completed all tax payments for the entire year

What we can do for you? Our tax pros at GTR Services will organize and make a list of all your income, expenses, assets, and debts owed against those assets.  File IRS Offer in Compromise forms and collection information forms of personal income error-free and on time required by the IRS.  GTR Services will ensure your offer is the best offer acceptable by law.

Currently Not Collectible Status

When your account is placed on CNC status, the IRS temporarily stops trying to collect money from you because your income does not provide enough funds to pay your tax debt. Furthermore, the IRS agrees not to take your assets or garnish your wages. The result is that you will not be charged anything.

Nevertheless, the Internal Revenue Service will closely monitor your account and may terminate your CNC status in certain circumstances, such as if your income rises or if you fail to file your tax returns.

It is also important to remember that your debt has not been erased but simply postponed. Therefore, interest and penalties will continue to accrue and tax liens will continue to be filed against you.

Filing for Currently Not Collectible Status requires producing personal income information on wages, assets, debts to credit cards and loans, all personal living expenses, including court-ordered payments, business income, and losses, if any, and the fair market value of all assets owned.