Do you want to know how you can submit an offer in compromise for tax debt? Then you have come to the right place, in this blog post we have discussed how to submit an offer in compromise for tax debt.
For people who do not have any idea regarding the submission of an offer in compromise for tax debt, we have explained that in the simplest way, the offer in compromise for tax debt allows you to settle your tax debt for less than the full amount that you actually owe. This is the only legitimate option if you are not able to pay your full tax liability. Or if you pay that, doing so can create a financial hardship for you or your family.
The offer in compromise can be beneficial for the person who has tax debt but lost his or her job or certainly faced any financial breakdown due to emergency circumstances. Before you submit an offer in compromise for tax debt, you must understand that it is only possible when the bank has collected or can expect to collect within a reasonable period of time.
Nonetheless, you must know that the offer in comparison is not for everyone, Yes, you have heard right! And that is why the majority of the people rely on their tax professionals to help them in their tax filing. If you also want to hire a tax professional you can go for it but before that, you must make sure they are capable enough for that.
Moreover, if you want to know how to submit an offer in compromise for tax debt you can read our blog post.
Submit an offer in compromise for tax debt
If you want to apply for an offer in compromise, then you must remember that you’re responsible for completing a few steps that comprise several forms. Alongside that, you must also remember to include your complete collection of information statements, whether it can be of your personal or your business.
Do you know in some of the cases you have included certain fees? Yes, you have heard right, you have to include 150 USD for the application fee, and in addition to that, you have to pay the first payment of your offer as well.
Nonetheless, to learn the step-by-step instructions and all the necessary blank forms which include your qualification for low income, and for that, you can read the IRS’s booklet on offer in compromise.
Lastly, you must remember if you offer to pay your initial payment should be 20 percent of the total offer amount. And when you will receive the written notice then you have to pay the rest of the amount in five or fewer payments.
Must known reason that can reject the offer in compromise
The following are some common reasons that can reject the offer in compromise:
- If you fail to provide enough information regarding your financial condition
- If you fail to pay any current tax payment of that financial year.
- If you have been convicted of a serious crime.
Hopefully, you have understood how to submit an offer in compromise for tax debt. Remember the reason that you can reject the offer in compromise.