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IRS OFFER IN COMPROMISE LAWYERS
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.
Effective Counsel
Effective counsel can take many forms. A complicated legal case may involve many layers of authority in New York state and New York City. Any individual or business owner may be facing issues with more than one tax agency. This can also be complicated if the person lives in another state. For example, a business owner may live in New Jersey but operate a business and file taxes in New York City. They may also live on Long Island in New York state but work in New York City and employ others who do so as well. An effective counsel can help the person sort through any laws that may apply to the person facing the IRS. The IRS will have lawyers on their side who know the law and understand the consequences of breaking it. All those who are facing this issue need to have the same legal firepower. This way, they can be assured that they are facing a level playing field with the IRS during this process.
Making Sense of Offers
The officials at the IRS may choose to make an offer. The terms of the offer will vary greatly depending on certain circumstances. For example, if the person only owes a little taxes, they may offer to settle for the amount owned as well as a small additional fee for interest. On the other hand, someone may owe lots of money in taxes. In that case, the person may be confronted with a much larger tax bill as well as specific penalties and additional interest. A person may also be confronting other problems as well such as potential jail time for themselves as well as for some of their colleagues. It helps to know exactly what’s on the table before doing anything else. It may not be immediately clear exactly what is being offered to the person. A good lawyer will help by going over every single line. They can point out many factors that the person may want to take under consideration.
Previous Legal Factors
Varied factors may be involved in any IRS offer. Lawyers can show the client what is in their personal best interest. For example, the offer may include forgiveness of money that may be owed to New York City but not money that is owned to the state of New York. The lawyer will help their client make sense of all the specifics that may might be involved in any decision they make. The client may decide to enter into further negotiations with the IRS. With the right counsel on their side as the process continues, it’s easier than ever to make sense of all possible options that each person faces. A lawyer can show why the IRS may have different rules that govern income earned in New York rather than income earned in other parts of the country. It’s extremely important to have informed counsel on hand in the aftermath of any IRS offer.
If you have been given a substantial tax bill following an audit, you might not have the means to pay it. Bills from the IRS will include back taxes, interest, and any penalties they’ve determined you qualify for. If you don’t pay the taxes, you could be subject to additional legal trouble. So what are you supposed to do?
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.
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.
It 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.
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.
There are guidelines that state that if you can’t pay a lump sum up front, you may also pay the agreed-upon amount over a predetermined period of time lasting a maximum of two years. If you do this, though, you will end up paying significantly more than if you just took the lump sum right away. So it’s only a good option for people who truly can’t pay everything at once.
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.
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.
Offers in compromise are not a quick fix to your tax problems. Negotiating with the IRS might take at least six months. In some cases, particularly complex or hard-fought ones, the process might take more than a year before finally reaching a settlement. When the IRS doesn’t offer a rejection or acceptance in two years, the compromise will be considered accepted.
While you have an OIC pending, you don’t have to pay your back taxes. You will need to pay your current taxes, though. This might include federal payroll taxes and quarterly income taxes. Failing to pay your current taxes will result in an immediate rejection of your OIC. On top of this, you won’t have any right to appeal the decision.
When you file for an OIC, you also need to submit a deposit. Your original filing will make an offer for the lump sum that you can pay. Your attorney will help you calculate an amount that’s reasonable for you to pay while still being likely to be accepted by the IRS. The filing deposit must be 20 percent of your lump sum offering.
If you choose the periodic payment plan, your first installment must be paid in full when you file. While the payment plan is in the evaluation process, you have to continue paying your installments at the appropriate due dates. If there is a withdrawal, return, or rejection of the OIC, your deposits will be kept by the IRS and applied to your tax burden.
You’ll also need to pay a basic filing fee of around 200 dollars.
If you do have an OIC accepted by the IRS, you have to pay all of your current taxes as soon as they’re due. That includes quarterly payments. If you fail to do this in the first five years after the acceptance, the IRS will immediately void the OIC and collect your tax penalty in full.