Do you Owe Money to the Internal Revenue Service?
Offer in Compromise could reduce what you owe The IRS.
If you owe more than $ 5,000 to the IRS, than an Offer and Compromise could reduce the amount of money you owe on back federal taxes. There are two basic types of Offer and Compromise (OIC) Doubt as to Collectability – Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection. Doubt as to collectability, Doubt as to Liability. Exceptional Circumstances Effective Tax Administration is the last OIC.
What is Doubt in Collect ability?
Doubt is collect ability is the tax payer will never have the ability to pay the back taxes they owe. You first must agree that the money you owe the Internal Revenue Service is correct. The tax payer cannot own a house, condo or rental property. Their monthly income does not meet the tax payer’s monthly necessary living expenses. Tax payers cannot pay the full tax owed now or threw monthly installments.
Example of Doubt in Collect ability
Example: A taxpayer owes $20,000 in taxes to the Internal Revenue Service for back taxes. The monthly income is only $1200 per month. Their living expenses are $1000. They have to show that the installments would create a major hardship. Where would the tax payer get the money to pay the tax bill if at the end of the month there is only $200 left.
Living expenses documented is the key to getting an Offer in Compromise. You are going to have to send all of your income and living expenses. Sending your pay stubs is an example of what they would ask for income expenses. Rent, utility bills, car insurance is just a few examples of living expenses. The tax agency is going to over your documentation.
When a tax payer owes the government money, the IRS Collection Division comes up with what your monthly payment should be. They are going to check your income and living expenses to see how much you can pay. If you show that there is no way to pay the tax liability, then the Offer in Compromise could work.
Contact: Corey & Associates Tax Accountants
Corey & Associates Tax Accountants has been helping their clients with tax issues since 1985. If you have any questions please contact us? The office address is 1800 West 68 St # 118, Hialeah, FL 33014. Our phone is 305-823-2998. You can email us at albert@1040W2.com. Check out our Facebook.Com/albertcorey for daily updates. We have video updates at Youtube.Com/tax1099a