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When a taxpayer can't pay a tax debt in full, or if there is a dispute with the amount the IRS
claims the taxpayer owes, the taxpayer may propose to resolve the matter with an Offer in Compromise.
An Offer in Compromise, if accepted by the IRS, settles a taxpayer's liability for less than the full amount owed. The ultimate goal is a resolution that is in both the
government's and the taxpayer's best interest.
If the IRS agrees to your Offer in Compromise, it may agree to accept less than full payment under certain circumstances, including:
- doubt as to liability
- doubt as to collectability
- hardship
In order to maximize the possibility that an Offer in Compromise is accepted by the IRS, it is important to work with a tax
consultant who understands the intricacies of this negotiation process.
It is more or an art than a science. Even issues completely outside of the control of a taxpayer can affect the IRS decision. Equity Search has handled thousands of Offers in Compromise with great success. They can help determine whether
an Offer in Compromise is the best approach to solving a particular problem, and they know exactly how to present
a case in order to maximize the chance that the offer will be accepted.
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The ultimate goal of an Offer in Compromise is a resolution that is in the government's and the taxpayer's best
interests. The IRS considers the following as reasons for a compromise:
- Doubt as to liability: Taxpayer demonstrated that it is not clear
whether the amount of money the IRS claims is owed is accurate
- Doubt as to collectibility: Taxpayer shows the IRS that, based upon your assets and income, you can’t afford to pay them the full amount you owe in a reasonable period of time.
- Effective tax administration offer: In rare cases, the IRS may allow you to pay less if you can show that it would be unfair to require you to pay the whole amount even if you had the means to do so. For example, if you were retired, and could only pay your debt by selling your home.
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The only way to determine whether an Offer in Compromise is the right solution is to examine your complete financial situation and all appropriate tax solution options. A qualified tax
consultant will look at your
complete financial situation and tax problems, and help you find the best solution. Equity Search offers free consultations to help make this determination.
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After an Offer in Compromise is accepted, the taxpayer must pay the offered amount. Afterward, tax liens and levies and released, and
the taxpayer gets a fresh start.
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Yes. In cases where hardship is demonstrated, the installment agreement can sometimes be stopped.
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This process can take some time, from six months to more than a year. The IRS ordinarily withholds collection action while they consider
an offer. However, unless the negotiations are handled properly, payments
could be mandated that will not reduce the amount of the offer, and could even result in an increase in final payment. Equity Search can ensure that these negotiations are handled properly from the beginning so that you don’t pay any more than absolutely required.
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Some tax services take a do-it-yourself approach, offering to send you nothing more than forms you
can obtain from the IRS on your own.
Some will then submit the forms for you. There is nothing here that
you couldn't do yourself ... for free. Do-it-yourself approaches are
mostly ineffective. Without an understanding of the various options,
without knowing how to navigate
the intricacies of the negotiation process, and wanting a short-term quick fix
usually bring a taxpayer right back to the beginning. The result: the
taxpayer spends more money,
more time and undergoes more stress then necessary, and in the end,
they turn to a qualified professional. Most of our clients
want success and a final solution ... not recurring problems.
A firm charging a flat-rate or subscribing to a do-it-yourself
philosophy is not a firm supported by a highly-qualified staff with years of education and experience involved in
determining effective tax solutions. Some companies accept client
fees, and then expect the clients to handle their own cases. Not
Equity Search. And although we handle tax problems on our clients'
behalf, our services go much further. We look at the complete
financial picture, create a plan, find the best solution to remedy any
problems, handle the tax problems on their behalf, and then advise our
clients on the best possible approaches to ensure future success. Our
clients tell us they feel as if we are part of their family, and we like
to think of ourselves as a part of theirs.
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