Unemployment, unstable income, unpredictable medical bills, and other monthly expenses combined with a poor financial decision can result in almost anyone ending up with a huge tax bill that cannot be paid in full.
Luckily, those who want to pay their taxes but cannot afford to do so now have several potential solutions.
A major tax relief solution lies in opting for an IRS settlement offer known as an Offer in Compromise. Although an Offer in Compromise is one of the most underused and misunderstood IRS tax relief options, it can be the perfect means for immediate tax relief.
At Delia Law, we work closely with you so that you understand your tax situation and how to get out of it. We’ll help you with everything you need to know about the Offer In Compromise tax relief option from “who qualifies for the program?” to the specifics of the IRS Offer in Compromise low income certification guidelines.
What is an IRS Offer in Compromise?
An Offer in Compromise or OIC is a tax relief settlement between a taxpayer and the IRS, where the IRS typically accepts less than the entire tax debt you owe them.
If you qualify for this IRS settlement offer, much of your tax debt can be cleared. In 2017 alone, the IRS accepted nearly 25,000 offers which resulted in around $256 million in tax relief.
So, don’t let anyone tell you that there’s no hope of getting tax relief if you can’t afford to pay taxes this year.
Types of Offers in Compromise
- Lump Sum Offer – A Lump Sum Offer requires a taxpayer to pay the agreed amount they owe the IRS within five months from the date that the Offer in Compromise is approved. To be approved for a lump sum offer, you must make a 20% down payment when you submit the offer and your application fee to the IRS. This downpayment is not refundable, so be sure to weigh your options well. There is no guarantee that the IRS will accept your offer in the first place. That’s why it is essential to consult a tax relief attorney to help you with the specifics of this kind of IRS settlement offer.
- Periodic Payment Offer – This offer must be paid within 6 to 24 months. In addition to application fees, the first payment is the same 20% required for lump sum cash offers. This payment is also non-refundable.
Delia Law offers free consultations to make sure you don’t waste time and money submitting offers only to be rejected by the IRS for checking the wrong box or missing an item on one of several forms you need to fill out. Each rejected offer means 20% of your tax liability is taken out of your bank account.
That’s why our consultations are always geared towards your personal tax relief needs. That way, you can choose the most suitable Offer in Compromise option without wasting money on rejected IRS settlement offers.
Our approach is educational and conversational with keen attention to the different challenges you’re facing with your tax debt problems. You shouldn’t need a law degree in order to understand what the IRS is doing to you and how to fix it.
Qualifications for an Offer in Compromise
Generally, the IRS considers a unique set of facts and circumstances to determine if you qualify for an OIC including:
- Your overall ability to pay your taxes
- Your monthly income
- Your monthly expenses
- Your assets and equity
To qualify for an IRS settlement offer, the IRS must conclude that one of the following conditions exist:
- You can’t afford to pay the full amount – The IRS will evaluate your situation and then accept that you can’t afford to pay the full tax debt before the statute of limitations ends – 10 years.
- Economic hardship – Paying the full tax debt you owe would cause you economic hardship. In most cases, in order to qualify you must already be working full time (30 hours per week for at least the next 3 months), and still be unable to meet basic needs if you pay your full tax debt.
- Doubt over the tax debt you owe – When there’s doubt over whether you really owe the IRS the tax, or there’s doubt about the accuracy of the amount owed, a settlement may be offered instead of the IRS using the time and money required for a close tax audit.
To be eligible for the above IRS settlement offers, taxpayers must be sure they have filed all the required tax returns on the appropriate forms, be up-to-date with estimated tax payments for business owners and self-employed individuals while keeping track of federal tax deposits for businesses with employees. The overwhelming amount of paperwork that must be filled out with pin-point precision is enough to keep many Americans from reaching a settlement.
That’s why it’s essential to have a tax lawyer who specializes in Offers in Compromise instead of trying to face the IRS’ bureaucratic nightmare by yourself.
When you are ready to propose an IRS settlement offer, Dawn Delia Esq. – the renowned Southern California Offer in Compromise attorney who founded Delia Law – will help you resolve your tax issues and determine which program is right for you based on your finances.
For a free consultation on how to resolve your tax debt issues, call us at (619) 639-3336 or complete our online form.