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How to Cut a Deal with The IRS to Pay Less

Can You Cut a Deal with The IRS to Pay Less

The short answer to this questions is yes. There is an opportunity for the taxpayer to apply for an Offer in Compromise, which allows them to pay less than what they actually owe in taxes.

How to qualify for Offer in Compromise?

  • You must have filed all of your tax returns for previous years.
  • You must prove that you can’t pay the full tax debt amount, or if you do so will put you in serious financial hardship.
  • You must not be in bankruptcy proceedings.

These are basic requirements for filing an Offer in Compromise, however covering them all does not guarantee that you will be granted an OiC.

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How to get Offer in Compromise accepted?

  • Consider your future income between 6 to 24 months when making an offer.
  • Start making payments. Withholding payments on the taxes you owe may result in rejection of your Offer in Compromise.
  • Make sure your calculations are correct. The IRS wants to see exact numbers and figures. If you think you can’t do it yourself, you should look for a good tax accountant to help you with preparing your Offer in Compromise.
  • Pay the application fee and the initial non-refundable payment.
  • Be honest about your circumstances. If you apply for Offer in Compromise just because paying the full tax debt amount will make you uncomfortable for a while, you will be rejected. It is only available to people who would be in a serious financial distress if they were to pay all they owe in taxes.
  • Give valid reasons for why you need an Offer in Compromise, for example, serious health problems, substance abuse, decreasing income due to old age or dependent care.

 

If you are in serious tax debt, we would advise seeking professional help for submitting an Offer in Compromise or consultation about other possible routes to minimize the financial pressure on you and your family. FAS CPA & Consultants are here for you, contact us on support@fascpaconsultants.com.

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Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA is a Certified Public Accountant, specialized In Tax Planning, International Business, Wealth Management and Offshore Banking. You can email him to fa@fascpaconsultants.com or follow us on Facebook : FAS CPA & Consultants.

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