Negotiating an Installment Agreement (IA) When You Also Owe State Taxes
It’s common to owe taxes to your state and the IRS at the same time; however, you must discuss payment plans with both simultaneously. This is to prevent you from not having enough money to split between the two.
Offer in Compromise – Paying Taxes for Pennies on the Dollar
A lawful reason is not grounds to have a tax bill lessened; it is up to Uncle Sam if you qualify. In most cases the IRS is obliged to give most requests for OIC (Offer in Compromise) balanced consideration. If turned down you can go to the IRS Appeals Court.
It is possible for the IRS and tax payer to work out a deal. Find out at the onset if you qualify as it could save you time and money.
An offer to the IRS takes a long time and must be properly processed with all the required documentation and items such as car registrations, pay slips and accounts.
Are You Eligible for OIC Consideration?
You must do more than request a deal with the IRS: you must not be bankrupt, must complete Form 656 and prove one of the following:
- Doubt as to Collectibility- It’s not a sure thing the IRS can collect your tax money owed.
- Doubt as to Liability- It’s not a sure thing your tax bill is correct (this is unusual).
- If you have enough assets to settle but extraordinary conditions initiating ‘economic hardship’ or ‘unfairness’ or ‘inequality’.