If you are unable to pay your taxes in full, you can accrue a tax debt—the difference between your taxes owed and taxes paid to the IRS. With Baltimore, MD, tax debt averaging over $16,000, it’s easy to see how an unexpected illness or change in finances can result in difficulty paying tax bills outright—fortunately, you can get IRS offer in compromise tax help in Baltimore, Maryland.
What Is IRS Offer In Compromise?
If you’re experiencing unemployment, medical bills, or other unexpected circumstances, you may be able to settle tax debt for a reduced amount. The process, referred to as an IRS offer in compromise, involves presenting your financial circumstances in a way that highlights your financial difficulties. You’ll submit several forms that summarize your situation and tax debt and proceed to make an offer that is then accepted or rejected by the IRS.
In general, the IRS states that it will accept an offer it believes is the most it can expect to receive from you in a timely manner, given your situation. However, arriving at this amount takes a great deal of preparation and insight into your situation as well as IRS tax regulations. As a result, if you’re in Baltimore, utilizing a professional tax attorney is the best way to increase your offer’s odds of acceptance.
How Does an Offer in Compromise Work?
For the IRS to accept your IRS offer in compromise in Baltimore, Maryland, you must first ensure that all tax returns are filed and up to date, and pay your current year’s estimated tax. Then, you’ll need to complete and submit a series of forms, located in the Offer in Compromise Booklet.
From the information on these forms, the IRS will determine your eligibility based on your income and expenses, your assets, your equity, and your ability to pay your taxes. To accept an offer in compromise, the IRS must conclude that one of the following situations exists:
You are experiencing economic hardship—paying your tax debt in full will cause you economic hardship despite working 30 hours per week.
Inability to afford timely payment—you are unable to pay the full amount of your tax debt before the statute of limitations ends in 10 years.
Potential errors in tax debt owed—there is doubt regarding the amount of tax debt you owe, or whether you are the individual who owes the debt.
What if Your Offer Is Accepted?
If accepted, you can make your reduced tax payment to the IRS as a lump sum (complete with a 20% down payment and application fee due at the time of the offer) within five months of offer acceptance. Alternatively, you can choose periodic payments over six to 24 months with the same down payment and application fee.
For this reason, it is crucial to supply all pertinent information and carefully review your offer in compromise packet for omissions or mistakes. Make your best offer the first time to avoid paying application fees and down payments each time an offer is rejected. To achieve this, consider getting help from an attorney in Maryland that specializes in offer in compromise.
How Delia Law Can Help You
An offer in compromise is a legitimate tax relief solution from the IRS that can help you settle your tax debt without wasting your valuable time and money on tax consolidation scams or certified public accountants. However, it’s vitally important you assemble a flawless offer in compromise packet, or you risk rejection and loss of your application fee.
An experienced tax attorney like the attorneys at Delia Law can help you prepare and file your offer in compromise and assist you in navigating the repayment process that follows. Our years of tax relief experience have afforded our attorneys a great deal of insight regarding the process.
Why Utilizing a Tax Lawyer or Attorney is Essential
For Baltimore residents, consulting a professional tax attorney for an IRS offer in compromise is the best way to navigate the pre-application, application, and payment processes. An experienced attorney can help ensure you’ve correctly filled out the IRS documents in question to avoid rejection. Additionally, your tax attorney can help you assemble the necessary accompanying documents to reflect your financial situation accurately.
After submitting your application, you must select your payment option and include the payment offered. Your attorney can help you calculate a payment offer that makes sense according to the documentation you’ve provided, making it much more likely the IRS will accept it. If your financial situation prevents you from making this payment or supplying an application fee, your attorney can help you apply for an exception.
Get Help from Delia Law for IRS Offer in Compromise
If you live in Baltimore and are having trouble paying your taxes in full, contact Delia Law. Our qualified tax attorneys can help you determine whether you qualify for IRS tax relief and assist you in completing your offer in compromise. With our help, you’ll submit the best offer the first time, reducing your tax liability and limiting your application fees in the process. Call to schedule a free consultation today.
Maryland-Specific Tax Laws
If you live in Maryland, it’s essential to consider Maryland tax law before making a decision regarding your federal tax debt. Maryland is a pay-as-you-earn state. You’ll pay taxes as a percentage of your income (from 1% to 5.75%) to be withheld from each paycheck. Unfortunately, if your withholdings are inaccurate, you risk additional interest, fees, or a larger than expected tax amount due.
Baltimore residents have until April 30th to pay Maryland state taxes. Consider doing so electronically to avoid additional penalties for late payments. If you’re unable to pay the full amount by the due date, file your return and pay as much as you can. Then, continue making small payments while you wait for your return to process.
When processing is complete, Maryland will mail you a balance-due notice with several payment arrangement options. You can select one and send the form back with your first payment or make a payment arrangement online. If you don’t see a payment term that works for you, contact a tax attorney about making an additional inquiry.