Tax Settlement Attorney in White Plains

If you are behind on your taxes, don't panic. An offer in compromise can help you settle your tax debt for less than what you owe. However, taxpayers must meet specific qualifications. There are three main situations where the IRS will consider granting an offer in compromise.

The situations are as follows:

• Doubt as to liability: This refers to a situation where there is a dispute about the amount you owe or whether you owe anything at all.
• Doubt as to collectability: This is the most common situation. Doubt as to collectability exists if you can demonstrate that your assets and income, when combined, are insufficient to pay the full amount of tax liability within the remaining time available to the IRS to collect.
• Promote effective tax administration: This is rarely used but it is considered when entering into the compromise would promote effective tax administration after the IRS has determined that although collection in full could be achieved, collection of the full liability would cause the taxpayer economic hardship as defined by the Internal Revenue Code.

If you fall into any of the above categories, the IRS may consider you eligible for an offer in compromise and my office can answer any questions you have about qualifying under IRS guidelines for filing a request for an offer in compromise.

Once you have confirmed that you do in fact qualify, we can assist you with filing the appropriate paperwork with this IRS. You will need to provide detailed information related to your finances, assets and expenses. We understand this can be overwhelming for those who are in desperate need of relief from tax debt and are here to guide you through each step of the process.

As part of the offer in compromise, you must propose the amount you are willing to pay the IRS as a settlement for your taxes. It is important to put together an offer that has a probability of success as there is presently a non-refundable application fee of $205 and your first payment (made with your application) towards your offer in compromise is also non-refundable. A minimum 20% of the offer in compromise amount must be submitted with your application, on a non-refundable basis, but it may be designated to a particular tax debt if the IRS does not accept your offer.

So, what does the IRS consider an acceptable offer? The answer is it depends on the available equity in your assets plus what the IRS views as your net monthly income x 12 (if the taxpayer is making a lump sum offer) or 24 (if the taxpayer is making a periodic payment offer).

Assets can be:

• Property
• Vehicles
• Or even your bank account

Your assets plus your anticipated future income minus living expenses equal what the IRS calls "reasonable collection potential." At this point, you may be wondering why the IRS would require this information.

Basically, what the IRS is looking for from an offer in compromise application is proof of your financial circumstances in exchange for considering to accept less than you owe.

They want the birds-eye view of your situation to determine whether or not to accept your offer in compromise. Once they can see the scope of the issue, they can evaluate their ability to collect what you owe and make their determination.