IRS OFFER IN COMPROMISE LAWYERS
Tax Compliance Requirements in New York
Paying taxes accurately is a must. Every single person will need to understand the tax laws that pertain to them personally. The same is true of any tax laws that pertain to a business they might own. Tax laws differ from place to place. Some states impose state taxes while others do not. New York natives and those who operate a business in the community will typically face several layers of taxes including federal, state and city taxes. Everyone must be in compliance with these laws at all times. Each person needs to be aware of the laws that may apply to them while they file taxes. In some cases, there may be dispute over the amount of taxes that must be paid. The Internal Revenue Service may not agree with the tax returns the person has filed. In that case, the IRS may be willing to work something out with the filer. Officials may offer a useful compromise that enables the parties in question to get a resolution to this issue and move on. While such offers can be useful, it’s best to have legal counsel in order to determine how to respond to any such compromise offered by the Internal Revenue Service.
What Is an Offer in Compromise?
One of the most commonly used solutions is the Offer in Compromise program that the IRS has. This allows you to settle your outstanding debt with the IRS by paying a lump sum up front. Once you do this, you will have solved your tax obligation, and you won’t be liable for any more fees or penalties going forward.
Offers in Compromise have been part of the tax code for more than half a century. In the past, there were strict rules and regulations regarding who could qualify for this program. But as time has gone on, the IRS has started to relax their guidelines on who qualifies. They are more concerned with making sure they get paid in a cost-efficient manner than in wringing every last penny out of someone who can’t pay it.
Who Qualifies for an OIC?
With that said, an OIC isn’t simple to come by. If you have any financial means to pay your taxes whatsoever, you can’t expect to get a break. You can talk to your tax attorney about your options to ask for an offer in compromise or another payment plan. They will be able to advise you on the best course of action based on your current finances and owed taxes.
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(212) 300-5196It is possible to get an OIC even if you aren’t technically in dire financial straits. But doing so requires the work of an extremely skilled professional.
| OIC Eligibility Factor | What the IRS Considers |
|---|---|
| Total Debt | How much you owe in both taxes and additional fees |
| Assets | Your assets |
| Existing Liabilities | Any existing liabilities |
| Current Income | Your income |
| Future Income Prospects | What your prospects are for income in the future |
Every offer in compromise is different depending on the case. First, the IRS will take into account how much you owe in both taxes and additional fees. Then they’ll take into account your assets, any existing liabilities, your income, and what your prospects are for income in the future.
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Large Tax Bills vs. Small Tax Bills
Strangely enough, this means that you’re less likely to receive an OIC if you only owe a small amount. Instead, people who owe large amounts of taxes are more likely to receive the offer. That’s because the IRS doesn’t want to waste time and expensive resources on legal proceedings and collections from someone who won’t even end up paying their full bill. It’s more efficient to simply forgive a portion of the excess taxes.
The IRS has referred your case to the Criminal Investigation Division after an audit uncovered discrepancies in your tax returns.
Is this different from a regular audit?
A CID referral means the IRS believes there may be criminal tax fraud, not just civil underpayment. Criminal tax charges carry prison time of up to 5 years per count. You need a criminal defense attorney at this stage.
This is general information only. Contact us for advice specific to your situation.
If the IRS believes that you will be able to pay all of your penalties, fees, and back taxes during the remaining collection period, they won’t accept an OIC. Instead, they will use all of the tools at their disposal to collect every cent from you before the statute of limitations runs out.
