When should you Submit Offer In Compromise

When you are sinking under the burden of accumulated tax debts, you should consult a qualified tax professional to ease you out of your difficult circumstances. Of the different ways to settle your debts to the IRS one major way is to submit for Offer in Compromise. There are five ways to circumvent your tax debts of which filing for bankruptcy under Chapter 7 or Chapter 13 are an option, but Offer in Compromise can also be availed if the taxpayer is able to establish any of the following conditions to qualify for this relief measure:

• Doubt as to Collectability: if the taxpayer can prove that he or she is cannot meet the debts due to their financial incapacity to do so, the IRS can maintain the discretion to let the debtor pay a reduced amount.

• Doubt as to Liability: If the taxpayer has doubts to the amount that is owed and penalties that may be levied, he or she can counter the claim. With the help of tax attorneys they can show that the liability is erroneous and submit an offer in compromise.

• Effective Tax Administration: When the debtor is unable to contest for the above, he or she may express their inability to pay off the debts, due to mitigating state of affairs i.e. an aged, disabled or individual under extreme economic hardship.

Applying for Offer in Compromise requires the deposition of certain forms. Taking advice from professional tax consultants, like a CPA, tax attorney or agent would greatly help you in achieving your aim of reducing or eliminating your tax debts. The terms for agreement in an Offer in Compromise would entail the following:

• Agreement to pay the offer amount settled between the parties, i.e. IRS and the debtor

• Assurance to file returns on time and also to pay taxes for the next five years within the stipulated time.

• Allow the Internal Revenue Service to retain all tax refunds, payments and credits applicable to tax debts prior to submission for the offer

• Allow the IRS to keep any tax refunds you were entitled to during the year of approval of the Offer in compromise

If a debtor fails to discharge the terms as stated above, the agreement contract would be revoked and the original tax liability would be reinstated. A qualified tax attorney would be able to prevent the invalidation of your Offer in Compromise. CT residents would get the best advice in all tax matters from expert lawyers in their area.