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Bring Your Tax Debts Down To Size With The Offer In Compromise

Bring Your Tax Debts Down To Size With The Offer In Compromise

Taking advantage of an Offer in Compromise can help many different men and women settle the amount of tax debt that is owed. When you apply for an Offer in Compromise, you have the chance to pay less than the amount that you owe to the IRS. This can be extremely helpful if you are not able to pay the full amount of taxes that you owe. It is also helpful if paying the full amount can cause financial problems for you and your family.

Being Eligible for an Offer in Compromise

When you apply for an Offer in Compromise, the IRS will consider your assets, the expenses that you must pay in order to live, the amount of money that you make and your overall ability to pay for your taxes. Most of the time, the IRS will approve your Offer in Compromise if the amount that you offer to pay is an honest representation of the most that you are able to pay within a reasonable amount of time. You will not be able to submit this offer if you are currently going through an open bankruptcy procedure.

Submitting an Offer in Compromise to the IRS

In order to send a proposal to the IRS, you will have to submit an Offer in Compromise. There are a few different documents that must be a part of this offer. For example, you must include Form 433 A and all of the documents that are specified in this form. However, if you are a business you must include Form 433 B instead. All businesses and individuals have to submit a Form 656 for all of the tax debt that is owed. In addition, you must pay an application fee of $150. You must also add the first payment for each Form 656 that you include in your Offer in Compromise.

Choosing a Payment Option for Your Offer in Compromise

When you submit your Offer in Compromise, you must also include the payment option that you would like to use. The IRS will base your payments on the payment option that you include in the Offer in Compromise.

If you choose the periodic payment option, your first payment must be included in your application. While the IRS considers your Offer in Compromise, you have to continue making payments on the rest of the money that you owe in monthly installments

If you choose to pay your tax debt with a lump sum payment, you have to include at least 20 percent of your Offer in Compromise with your application. You must also continue to make your payments while you wait for an acceptance of this offer. Paying off your tax debt must be done with five or less payments.

Huge Changes To The Offer in Compromise Allow More To Qualify And Settle For Less

More Information

The payments that you include with your Offer in Compromise will be added to your tax debt. In addition, your offer is accepted automatically if the IRS has not made a decision within two years of your IRS receipt date. You can request for an appeal of your offer 30 days after your rejection as well.





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