If you live in Oklahoma and you have unpaid federal tax debt, you may be able to settle your back tax debt for a fraction of the amount owed. The Internal Revenue Service (IRS) has created a variety of tax settlement options to help Oklahoma taxpayers pay their back tax liability and meet future tax obligations.
Offer in Compromise is one of the most popular tax settlement options available for Oklahoma residents. Oklahoma taxpayers who are considering Offer in Compromise should contact a tax professional for assistance. Unfortunately, the Internal Revenue Service accepts approximately 25% of Offer in Compromise offers at the initial application level and Oklahoma taxpayers who have been denied an Offer in Compromise will not have legal recourse against the IRS.
Penalties and interest will continue to accumulate while the Offer in Compromise is under review and if the offer is denied the Internal Revenue Service can use the detailed financial information you have provided to them to complete their debt collection actions against you. Tax professional may be able to help complete the Offer in Compromise application and increase the likelihood the OIC will be accepted.
Qualifying for Offer in Compromise in Oklahoma
The Internal Revenue Service will only accept an Offer in Compromise offer if it meets certain criteria including:
- Doubt as to Liability- Oklahoma taxpayers who question the amount of liability they have been assessed may meet the condition of doubt as to liability. The condition is not frequently met.
- Doubt as to Collectibility– Under certain conditions the Internal Revenue Service will determine they will not be able to collect federal tax debt. This differs from the first condition in that the amount of debt is not in question, only the ability of the Internal Revenue Service to collect the debt.
- Effective Tax Administration– Certain Oklahoma residents will not be able to pay federal tax debt with out “an economic hardship which is inequitable and unfair”. If the Internal Revenue Service agrees with this determination, they will accept an Offer in Compromise. In most cases this condition will apply for the elderly and the disabled.
Rejection of Offer in Compromise in Oklahoma
The Internal Revenue Service will accept approximately 25% of the OIC offers it receives. Oklahoma taxpayers who are denied will be sent written notification which outlines the reason the OIC was denied and the amount of money the IRS would consider reasonable. The Internal Revenue Service most frequently denies Offer in compromise offers because they have included the offer was too low. If the Internal Revenue Service refuses to provide information concerning an Offer in Compromise, Oklahoma taxpayers are legally allowed to access it under the Freedom of Information Act.
Oklahoma taxpayers can contact a tax professional for information about the Offer in Compromise appeals process. Oklahoma residents who are filing an appeal will not have to file another Form 656 if their financial data has not changed significantly. New forms may need to be filled out for Oklahoma taxpayers who have failed to file an appeal with in the specified time frame.
The Internal Revenue Service has no legal obligation to Oklahoma residents to accept OIC appeals, but in many cases they will be willing to negotiate with them to help the taxpayer pay their federal tax liability.
Appealing an Offer in Compromise in Oklahoma
Oklahoma taxpayers who have been denied an Offer in Compromise may hire a tax professional or personally contact the IRS administrator who reviewed their Offer in Compromise application and attempt to re-negotiate their offer. If these negotiations fail, a more formal appeal’s process is available. Offer in Compromise offers can be appealed by sending a written request to the Internal Revenue Service with in thirty days from the date of the Offer in Compromise denial letter.
Steps to file an Offer in Compromise
Oklahoma residents who want to submit an Offer in Comprise must complete the following tasks:
- Submit detailed financial information to the Internal Revenue Service
- File all past and present federal tax returns to the Internal Revenue Service
- All self-employed Oklahoma residents must file estimated taxes and tax returns quarterly
- Oklahoma residents must have paid their tax debt for all periods not covered by the Offer in Compromise
Oklahoma residents must fill out the following Offer in Compromise forms:
- IRS Form 656- Offer in Compromise. Oklahoma taxpayers must complete IRS Form 656 which will provide detailed financial information for the IRS and the taxpayer’s ability to pay their tax debt payment.
- IRS Form 443 A- Collection Information Statement for Wage Earners and Self-Employed. This form will provide more data about the Oklahoma taxpayer and their ability to pay IRS tax debt.
- IRS Form 443-B- Collection Information Statement for Businesses. This OIC form is similar to the Internal Revenue Service Form 433-A. Oklahoma taxpayers will complete this form if their business tax debt is part of their Offer in Compromise offer.
- IRS Form 656-A- Income Certification for Offer in Compromise Application Fee and Payment. This form is completed only if the Oklahoma taxpayer is requesting an Offer in Compromise fee waiver.
Oklahoma Tax Professionals
Can Oklahoma taxpayers complete an Offer in Compromise with out a tax professionals help? Certainly, but the Internal Revenue Service is an aggressive collector. Their collection tactics will be much more aggressive and far reaching than other tax collectors. If the Internal Revenue Service has begun wage garnishments, bank account levies, or repossession of your personal assets, it is important to get help.
Tax professionals have experience negotiating Offer in Compromises and they know how to evaluate a taxpayer’s financial situation and make a fair and reasonable offer. Offer in Compromise is just one of several tax settlement options and may not be the best option for you or your family.