Naples Offers in Compromise Attorney
Unpaid taxes can result in debilitating tax debt that can affect your life and your business in a wide variety of ways. You can be at risk of a tax lien or a levy. A levy can result in the seizure of your personal wages or money from accounts receivable at your business, for example, while a lien can make it difficult or impossible to sell any assets or to obtain credit for a new loan or refinance. The best way to avoid the consequences associated with unpaid taxes is to enter into an agreement with the IRS. There are many types of agreements that can allow you to avoid liens and levies and other serious repercussions of unpaid taxes. In some circumstances, a taxpayer may be eligible for an offer in compromise, which can reduce the amount of tax debt owed. You should contact a Naples offers in compromise attorney to find out if this option is available to you.
What is an Offer in Compromise
An IRS offer in compromise is a way in which a taxpayer may be able to reduce their tax liability. The IRS expressly defines an offer compromise as “an agreement between a taxpayer and the Internal Revenue Service that settles a taxpayer’s tax liabilities for less than the full amount owed.” Offers in compromise, or OICs, are not available to every taxpayer. To be sure, taxpayers who may be able to enter into a payment plan in order to pay tax debt, or taxpayers who are likely to be able to pay more than the reduced tax liability sought through an offer in compromise, will not typically be eligible for an offer in compromise. However, it may be possible for your lawyer to negotiate an offer in compromise with the IRS in order to reduce your total tax debt.
How to Become Eligible for an Offer in Compromise
In order to be eligible for an offer in compromise, a taxpayer must meet several requirements. First, the taxpayer must have filed all required tax returns. Next, the taxpayer must have made any estimated tax payments required for the current year. Finally, if the taxpayer owns a business, the taxpayer must have made federal tax deposits for the current quarter required by law. Once a taxpayer has met these requirements, the taxpayer must still prove that the reduced tax liability sought by the offer in compromise is “equal to or greater than the reasonable collection potential (RCP),” according to the IRS.
There are several reasons that the IRS may accept an offer in compromise, including the following:
- There is a genuine dispute over the amount of tax owed;
- Doubt exists concerning the collectability of the tax debt; or
- Requiring full payment would create an economic hardship for the taxpayer or would otherwise be unfair or inequitable.
Contact Ronald Cutler, P.A. for Help with an Offer in Compromise
Ronald Cutler, P.A. can assist you with an offer in compromise. We have years of experience serving clients with tax issues. Contact our experienced Naples offers in compromise attorney today.