Many individuals become worried when facing IRS tax debt and the possibility of being summoned to attend a detailed audit. Failing to address this critical situation, however, can lead to increased penalties and devastating consequences. It is wise to confront the issue and thoroughly explore any options available to you.
One option that many individuals can pursue is the offer in compromise. If you can successfully argue that you do not have the ability to fully pay your tax debt or that doing so will create a financial hardship, an offer in compromise allows you to settle your debt with the IRS for less than the full liability.
What financial factors might be considered?
Working with an experienced attorney, you can clarify the facts of your unique situation during multiple IRS negotiations. The organization will consider factors such as your ability to pay, your income, your expenses and your asset equity. The IRS will calculate whether the amount offered matches what they have determined to be the maximum amount they can expect to collect from you within a reasonable amount of time. Your chosen legal professional can help you develop a strong offer that will be close to the IRS’s own calculation.
Based on several factors, it is possible that the IRS will reject your offer. It is important to remember, however, that the rejection can be appealed within a strict time period. Do not hesitate to thoroughly understand your tax debt options and specific requirements you face through the offer in compromise process.