Are you feeling buried in tax bills? Are your tax liabilities draining funds faster than you can earn them? If you’re struggling to pay your tax bills, you might benefit from an Offer in Compromise (OIC). Following is a quick guide to the program. Your tax preparer in Jamestown, ND can partner with you to work through the process and help you use it to your advantage.
An Offer in Compromise is a settlement agreement with the IRS. The IRS agrees to accept less than the full amount owed due to the taxpayer’s inability to pay the bill. The taxpayer must demonstrate that they qualify for the settlement and complete the required application process.
Taxpayers who are able to pay their bill won’t receive an Offer in Compromise from the IRS. The organization will only resort to this settlement if the situation is a “better some than nothing at all” scenario for the IRS.
To qualify, the taxpayer must be unable to pay their bill, be current with all previous filings and payments and cannot be in the midst of a bankruptcy filing.
The application process for an Offer in Compromise can be challenging. Not surprisingly, the IRS requires a lot of detailed information that must be correctly filed in order to apply for this compromise and achieve the settlement. Those without experience in tax filings and complex returns can benefit from the assistance of a tax preparer in Jamestown, ND to help with this application process.
To apply, the taxpayer will need to supply information about his or her income, expenses and assets. The income portion must include all personal wages, plus any business profits, rental income, self-employment income, child support, alimony and investment earnings.
Expenses include anything the taxpayer pays regularly, such as mortgage or rent, child support, alimony, daycare expenses, taxes (state and federal), vehicle maintenance and insurance (life, health and auto). When calculating assets, the taxpayer must include the market value of their home, any stocks and bonds, the value of their vehicle(s), any retirement savings and the current balance in checking and savings accounts.
Again, compiling all of this information can feel overwhelming. Taxpayers can turn to their tax preparer in Jamestown, ND to ensure all their I’s are dotted and T’s are crossed to increase the chances of IRS approval of their request for an OIC.
If granted, the Offer in Compromise will reduce the amount the taxpayer owes. In some cases, the final amount may be a small fraction of the original bill. Any tax liens previously put in place will be released. Additionally, the OIC will not affect the taxpayer’s credit score.
If you think you might qualify for an Offer in Compromise, contact the experts at Craig S. Hanson, CPA. As a leading tax preparer in Jamestown, ND, we offer in-depth knowledge and experience to help you work through this process. Contact us today—we look forward to partnering with you to provide tax bill relief.