You may be eligible to settle your tax debt for less than you owe: If taxpayers are unable to pay a tax debt in full, and they may be able to take advantage of the offer in compromise (OIC) program, whereby the IRS may accept less than what you actually owe. This has been advertised as “Pennies for dollars” by various outfits offering IRS problem resolution services. Further more there are several conditions to fulfill, e.g. filling tax returns on time, no extensions for filing, refund on first tax return filled, after acceptance of the offer in compromise is forfeited by the service.
There is a user fee charged by the services when submitting an offer in compromises, waiveable under special circumstances. The OIC can be presented on the following reasons:
- Doubt as to Liability – Doubt exists that the assessed tax is correct.
- Doubt as to Collectibility – Inability of the taxpayer to pay in full the tax liability.
- Effective Tax Administration – There is no doubt the tax is correct and the ability to pay is there, but an exceptional circumstance exists that could cause an economic hardship or full payment would be unfair and inequitable.
The amount that you pay to the IRS is based on two things:
- Assets of the taxpayer: How much your assets are worth, after deducting the loans against them.
- Income of the taxpayer: Your current earnings and your reasonable expenses.
Contact us for more information or call us in our Doral, FL office at Call 305-500-9361 today!