Miami Offers In Compromise Attorney
Taxpayers who owe the IRS and who are unable to pay the full amount don’t have to wait for the agency to levy their assets or garnish their wages. Instead, taxpayers who can proactively reach an agreement with the IRS could avoid these penalties, while also paying off their debt in a more manageable way. Offer in Compromise (OIC) agreements, for example, allow taxpayers with liabilities to the IRS, to settle a debt for less than the amount actually owed. Not everyone qualifies for an Offer in Compromise agreement, however, so if you owe the IRS and have questions about your own eligibility for this type of program, it is important to contact an experienced Miami Offers In Compromise attorney who can advise you.
Eligibility for OIC Agreements
To qualify for an OIC agreement, taxpayers must fulfill certain responsibilities, including:
- Filing all of their tax returns;
- Making all necessary estimated tax payments for the current year; and
- Making all federal tax deposits for the current quarter if they own a business.
The IRS will also generally refuse to enter into an OIC agreement with a taxpayer unless the amount being offered in lieu of the full debt is equal to or greater than his or her reasonable collection potential (RCP), which is used to measure a taxpayer’s ability to pay back a debt. A person’s RCP is based on the value of his or her assets, including real property, vehicles, and bank accounts, as well as that individual’s anticipated future income.
Even if a taxpayer satisfies this burden, the IRS will only accept an offer if:
- There is a genuine dispute about the existence or amount of the taxpayer’s debt;
- There is doubt that the full amount owed is actually collectible, as the taxpayer’s assets and income are less than the full amount of the liability; or
- There is evidence that requiring payment in full would create an economic hardship, or be unfair due to exceptional circumstances.
The forms that a taxpayer uses to request an OIC agreement will depend partly on the reason for the request. For example, those whose OICs are based on doubt as to collectibility must fill out Form 656, while a taxpayer submitting an offer based on questions regarding liability would need to submit Form 656-L and Form 433-A.
When making an OIC agreement proposal to the IRS, taxpayers can choose one of a number of different types of payment options, including:
- A lump sum cash offer, which is any offer payable in five or fewer installments within five months after acceptance of the offer; or
- A periodic payment offer, which includes payments that can be made in six or more installments within two years of the offer’s acceptance.
Fortunately, even if a taxpayer’s OIC proposal is rejected, he or she will have the right to appeal the IRS’ decision. However, in order to be considered, the appeal must be filed within 30 days of the agency’s initial rejection.
Call Today to Speak with an Experienced Miami Tax Attorney
Please call dedicated Miami Offer in Compromise attorney Ronald Cutler, P.A. at 386-490-9949 to learn more about your own options for repaying the IRS.