Offer in Compromise

One option that might help you find a way out of your tax troubles is an offer in compromise. This can be a sound tax resolution that allows you to both qualify and negotiate favorable terms. In simplest terms, an offer in compromise occurs whenever the IRS agrees to accept less than the full amount of the tax obligation.

Limitations on Offers in Compromise. Unfortunately, not everyone will qualify for an offer in compromise. To qualify for an offer in compromise, the IRS requires that these three conditions be met: (1) You must have filed all tax returns; (2) You must have made all required estimated tax payments for the current year; and (3) If you own a business with employees, you must have made all required federal tax deposits for the current quarter. Offers in compromise are intended only for someone who is generally doing what they’re supposed to be doing and who the IRS determines deserves a break.

Qualifying for an Offer in Compromise. Why, you might be wondering, would the IRS agree to accept less than they’re owed? The answer isn’t that the IRS has a soft heart. Instead, the answer is economics. The IRS discloses that it won’t generally accept your offer in compromise unless your offer is equal to or exceeds what the IRS believes it can collect. The IRS calculates how much it could realize by seizing and selling your real property, vehicles, bank accounts, and other non-exempt assets, and by garnishing your future income above basic living expenses.

The IRS is also much more likely to accept your offer in compromise when you have the help of a lawyer who understands these processes and knows how to use them to help you. The IRS Help Attorneys at The Law Office of Beverly Winstead, LLC can make sure your offer has a better chance of being accepted.

The IRS has three specific reasons they use to justify accepting an offer in compromise:

• When there is doubt as to the liability of the taxpayer for the tax obligation, such as a genuine dispute over the correct amount of the tax debt;
• When there is doubt as to the collectibility of the taxpayer because the taxpayer’s assets and income are less than the amount of the tax debt;
• When collecting the full amount would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.

Negotiating an Offer in Compromise. The IRS Help Attorneys at The Law Office of Beverly Winstead, LLC can raise genuine issues regarding your liability for the tax obligation, if those grounds exist. Advocacy plays an especially important role in establishing that payment in full would be unfair and inequitable because of your exceptional circumstances. The IRS may consider the amount of the debt and your limited assets and income and other factors like your age, health, family circumstances, and how the tax debt arose.

Founding and managing attorney Beverly Winstead of The Law Office of Beverly Winstead, LLC has the full respect of her tax-lawyer peers, having chaired the Maryland State Bar Association’s Tax Section. Attorney Winstead recruited, trained, and equipped her team of IRS Help Attorneys specifically to negotiate offers in compromise for deserving clients. Call The Law Office of Beverly Winstead, LLC now at (301) 306-1234 or contact the firm online to retain the help of a qualified tax attorney to negotiate your offer in compromise.