An Offer in Compromise is one of the tools the IRS uses to administer the tax laws of the United States. When IRS feels they have no options left, they will allow qualifying individuals and businesses that file an Offer in Compromise to reduce their overall tax burden.The IRS accepts offers in cases where there is a doubt as to the ability to collect, doubt as to liability or in the interest of effective tax administration. Few offers go through and caution should be used before filing an Offer in Compromise.
IRS received about 48,000 Offers in Compromise in 2008 and accepted only 11,000. Since 2000 the number of repeat offers made by taxpayers, after an IRS rejection, has grown with the percentage ranging between 15% – 44% of the total number of offers received by the IRS.
Sadly, in most cases fiction. The IRS accepted around eleven thousand offers in 2008 for an average settlement of 14 cents on the dollar. Breaking down the statistics, very few people are eligible. Only individuals who have limited income and have depleted their assets. Don’t place too much reliance on the inflated claims of commercials on the Internet and tv. It can be true if you qualify, but the guidelines are very strict. A Fresh Start Tax Professional can help you make a determination over the phone whether an Offer in Compromise makes sense for you.
The bottom line is find a tax professional who understands the IRS tax system. Fresh Start Tax will advise you how to get the greatest tax savings and submit the proper documentation to increase the likelihood of an IRS acceptance of your settlement offer.
An Offer in Compromise does not affect your credit. Credit services have no idea that you have filed an offer or are seeking relief. The key is that your offer is accepted. Once the offer is accepted and paid, any tax lien should be released. You should contact the credit companies and make sure the released lien is reflected on your credit report.
You have many rights as a taxpayer. There is a Taxpayer Bill of Rights, it can be found at IRS.gov. It is best for a professional to decide when to explore your rights and what your best options are, depending on where your case is with the IRS. The Taxpayer Bill of Rights should be used wisely as the rules can be complex.
I usually know when something is wrong with my car, but I do not know how to fix it. We have professionals who have worked in the tax business for over 60 years and worked for the IRS. We know the business, the systems, the rules and the regulations. You do not know if you are getting the best possible outcome, we do. The IRS acts in their best interest, not yours. The federal tax system is complicated and we have years of experience to tap into for providing you the best outcome of your IRS tax problem.
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