offer in compromise

The first requirement for resolving an IRS or state tax debt is tax compliance. Contrary to what many people think, if you owe back taxes, your first priority should actually be paying the current year. Those that don't withhold or pay their current taxes often find themselves in a viscous cycle of constantly struggling to re-pay back taxes and continually owing when it comes time to file again.

Washington Tax Services Provides a variety of services to assist individuals and small businesses with all types of tax needs.

Have you ever fallen behind on your taxes? For most wage earners, taxes are something that they deal with sometime between January 1st and April 15th every year, they usually pay a little or get a little money back and then forget about them until the next year. For the self-employed and for business owners, taxes are a whole different beast. Saving money for estimated payments, dealing with payroll taxes, sales tax, and all of the other taxes we have a duty to pay is an everyday concern. Have you ever fallen a little short one month and not made those payments?

The Offer in Compromise is the most straight forward and effective method of seriously reducing your tax debt. If you qualify for an Offer in Compromise, you will only be required to pay a small fraction of what you currently owe to settle your tax debt for good. The Offer in Compromise program is offered by the IRS and also by many states.

The great part about this is that once your Offer in Compromise is signed and accepted, the IRS cannot come back and change your payments or charge you additional interest or penalties for the tax years you settled on.

by Jay Freeborne, EA

We identified 12 ways to resolve a tax balance owed to the IRS and separated them into TWO CATEGORIES: Permanent and Temporary Relief. Look through the list and see where your situation may be resolved. Call us to discuss further.

PERMANENT RELIEF

Reducing the debt - HARDSHIP

1. Offer in Compromise - Doubt as to Collectability
2. Bankruptcy Chapter 7

Reducing/eliminating the debt - INACCURACY

1. Amended Return
2. Substitute for Return Reconsideration
3. Tax Court

You may have asked yourself the question “should I make my own offer in compromise?” To answer this question, you first need to consult a tax professional who helps you to settle your tax debts. Only after this will you know if you should make your own offer in compromise. Eventually, the decision would depend on your particular financial situation. The tax professional initiates the process of determining your potions by preparing a financial statement that reflects your income and assets.