Offer in Compromise (OIC) is an agreement between the taxpayer and the Internal Revenue Service to negotiate and pay a tax liability for less than the total amount owed. The Internal Revenue Service will agree to an Offer in Compromise if a taxpayer meets certain criteria and is not in a position to pay their federal tax debt in full. The Internal Revenue Service will only agree to an Offer in Compromise when it considers the offer to be in the best interest of the federal government and the taxpayer.

Alabama taxpayers who have federal tax debt and are unable to pay, may want to contact a tax professional  such as a tax attorney or tax accountant to discuss all available tax settlement options. Failure to pay federal tax debt can result in heavy fines and penalties, bank account levies, repossession of personal property and wage garnishments. Do not wait to call for help. Tax professionals in Alabama are familiar with the debt collection tactics of the IRS and can help provide relief.

Offer in Compromise in Alabama

Alabama taxpayers may be able to pay a small percentage of their total Internal Revenue Service debt they owe through Offer in Compromise. Offer in Compromise is offered in Alabama and in all other states. The goal of Offer in Compromise is to help Alabama taxpayers meet their current tax debt obligations so they will be able to pay their future tax liability.

Approximately 20% of the OIC applications are approved in the initial review process. Hiring a tax professional who is more familiar with the submission process and the Offer in Compromise forms may help increase your chances.

Qualifying for Offer in Compromise in Alabama

• Doubt as to Liability – Alabama residents who doubt the amount of their outstanding tax debt may be able to prove Doubt as to Liability. Taxpayers must submit an explanation to the IRS outlining why they doubt the liability amount. Taxpayers may want to discuss other less costly and difficult ways to review their tax debt liability with a tax professional with out filing for Offer in Compromise.
• Doubt as to Collectibility- The Internal Revenue Service must believe there is a doubt that the tax debt will ever be collected. Under this condition, there is not a doubt as to the amount of tax liability only the ability to collect.
• Effective Tax Administration- The Alabama resident is not disputing the amount of tax debt owed, only that collection of the federal tax liability would “create an economic hardship which is inequitable and unfair”. This is mainly used for the disabled and elderly.

Additionally Alabama residents must meet the following criteria:

• Individuals can not have an open bankruptcy claim
• All federal tax returns must be filed
• Offer in Compromise fee of $150 must be paid or waived
• All appropriate forms including forms 656, 433-A or/and form 433-B and all requested financial information must be submitted
• Taxpayer must be current with income taxes for the current year or if self-employed they must be current with the estimated taxes due

Rejection of Offer in Compromise Offers in Alabama

The Internal Revenue Service is required to send the Alabama taxpayer written notification of the OIC denial and the reason the offer was denied. The most common reason most Offer in Compromise applications are denied is the IRS believes the offer is too low. In the denial letter, the Internal Revenue Service must indicate the amount they have determined to be reasonable. Alabama taxpayers have the right to access all information regarding their OIC under the Freedom Information Act.

If the Offer in Compromise application has been denied, a tax professional can help you appeal the decision. A new form 656 will not need re-submitted unless there has been a substantial change in your financial situation or you fail to make your new offer with in 30 days from the date of the denial.

Appealing an Offer in Compromise in Alabama

The OIC administrator who denied your first Offer in Compromise application may be the best place to start for negotiations. Failure to get a more favorable decision may require you to file a more formal appeal. A letter must be sent to the IRS with in 30 days of the denial letter to make a formal appeal. Tax professionals have the necessary experience to negotiate appeals. The IRS has the ability to refuse your Offer in Compromise and they can not be sued by Alabama taxpayers for failure to accept offers. To increase the chances that your Offer in Compromise application will be accepted, you must complete the following tasks:

• Federal tax returns must be filed
• Accurate and detailed financial records which are request by the IRS must be submitted
• Self-employed individuals must make estimated quarterly tax payments
• Federal tax debt for the previous years must be paid

Alabama Tax Professionals

Alabama taxpayers who are considering Offer in Compromise may want to contact a tax professional for help. Tax professionals who are familiar with the Offer in Compromise process will include enrolled tax agents, tax attorneys and tax accountants. If you are not able to file an Offer in Compromise, there may be other tax settlement options available. It is important to take immediate action if you have a federal tax liability and not wait for the Internal Revenue Service to find you.

Benefits of Offer in Compromise

1. Temporarily stops debt collection efforts by the IRS
2. Allows the Alabama taxpayer to potentially pay less than their original tax debt
3. Can stop tax liens against property after the OIC is complete
4. May allow the Alabama taxpayer to avoid filing personal bankruptcy
5. Alabama residents may be able to eliminate the worry and fear associated with having a large tax liability and dealing with the IRS tax collectors.

If you live in the state of New Mexico and have failed to file taxes and the Internal Revenue Service is threatening to seize your property or bank accounts, call us now and our New Mexico Tax Attorneys may be able to help you settle your back tax debt obligations.

The Internal Revenue Service has accepted thousands of Offer in Compromise reduced tax settlement offers which has allowed New Mexico taxpayers relief from their stressful tax debt. Failure to pay taxes can mean huge future payments for penalties and interest. Don’t get blindsided, call a New Mexico Tax Lawyer for help.

The Internal Revenue Service (IRS) is an aggressive debt collector and if you owe back taxes and they have not contacted you, they will. Our New Mexico Tax Attorneys have experience with dealing with the IRS and can help you protect your pay check, home, bank account and other assets from seizure or levies by determining if you meet the qualifications to qualify for Offer in Compromise. If you do, your tax lawyer can gather your tax information and help you prepare your Offer in Compromise application and submit it to the Internal Revenue Service.

Offer in Compromise for Debt Settlement in New Mexico

Offer in Compromise is a program offered by the Internal Revenue Service to help New Mexico tax payers settle their tax debt obligations by paying a fraction of the amount they owe. Offer in Compromise is offered in New Mexico as well as all other states. The goal of Offer in Compromise is to help Mexico taxpayers get current on their tax debt obligations so they will be able to pay their future taxes.

The Internal Revenue Service will accept approximately 20% of the Offer in Compromise applications they receive each year. A New Mexico Tax Attorney can help you submit the appropriate documentation and increase your chances that the Internal Revenue Service will approve your Offer in Compromise application.

Qualifying for Offer in Compromise in New Mexico

• Doubt as to Liability – New Mexico residents may qualify for Offer in Compromise if there is a doubt to the amount of tax liability they owe the Internal Revenue Service. Unfortunately, this argument is rarely proven and is generally only used if the taxpayer has lost on appeal, litigation or if the time has passed to appeal an assessment.
• Doubt as to Collectibility- New Mexico residents must prove that the IRS is unlikely to collect the full amount of tax liability the taxpayer owes.
• Effective Tax Administration- Under Effective Tax Administration the New Mexico residents is not disputing the tax liability or the collectability, but instead, argues that collection of the tax debt would “create an economic hardship which is unfair and inequitable”. All New Mexico taxpayers can use this option, but it is primarily used if you are disabled, elderly or have other extenuating circumstances.

Benefits of Offer in Compromise

1. Offer in Compromise will temporarily halt collection efforts by the Internal Revenue Service while your Offer in Compromise application is under review by the IRS.
2. Offer in Compromise will allow the tax payer to pay less than the original tax amount owed.
3. Offer in Compromise can stop tax liens against property once the tax debt is paid.
4. Offer in Compromise may allow a New Mexico taxpayer to avoid filing bankruptcy.
5. Offer in Compromise may allow a New Mexico resident a fresh financial start with out the fear of the IRS tax collectors harassing them for unpaid tax debt.

Contacting a New Mexico Tax Attorney

The Internal Revenue Service has powers to collect federal tax debt using a variety of aggressive methods including: levies of bank accounts, applying federal tax liens against your property and wage garnishments.  If you are unable to pay your federal tax bill in full or if you are behind in tax payments, it is important to take immediate action and not wait for the Internal Revenue Service to contact you. A New Mexico Tax Attorney can help find the best tax settlement option you.

Offer in Compromise Filing Information:

If you reside in the following states:

Alaska, Alabama, Arizona, California, Colorado, Hawaii, Idaho, Kentucky, Louisiana, Mississippi, Montana, Nevada, New Mexico, Oregon, Tennessee, Texas, Utah, Washington, Wisconsin or Wyoming,

AND

And you are a wage earner, retiree, or a self-employed individual without employees, Form 656 and necessary attachments are sent to:

Memphis Internal Revenue Service Center COIC Unit

PO Box 30803, AMC

Memphis, TN 38130-0803

If you are OTHER than a wage earner, retiree, or a self-employed individual without employees, Form 656 and necessary attachments are sent to:

Memphis Internal Revenue Service Center COIC Unit
PO Box 30804, AMC
Memphis, TN 38130-0804

You may already be aware that avoiding an IRS settlement for your past due tax returns could lead to serious consequences if unaddressed, including garnishment of wages, a reduced credit rating or claim to your property. But did you know filing for back taxes could put money in your pocket?

If you were due a refund from a previous year’s taxes, you only have three years from the return due date to file, and subsequently claim the return. You could be throwing money away that the government owes you.

Whether you’re facing a tax debt or the IRS owes you, filing your back tax is the financially wise thing to do. Resolving past due tax returns with the IRS will give you the financial freedom to pay your monthly expenses and enable achievable financial goals for your future.

The IRS has a history of collecting on back taxes, and in its recent strategic plan for 2009 – 2013, the government branch reaffirmed its goal to quickly collect past-due taxes.

Your best option is guidance from an experienced tax attorney who has helped many people just like you get their prior year’s taxes filed. You need an attorney who will factor every situation you faced during the year for which you are filing, including whether or not you were searching for a job during that year.

Federal tax laws change yearly, and how much expertise your tax attorney has with these laws will ultimately translate to the best financial agreement you can make with the IRS.

Don’t hesitate to contact an experienced tax lawyer before the IRS contacts you.

Any IRS debt only adds to your struggles in this economy. The government wants to make it easier to pay your taxes, yet others within government are calling for additional reforms.

In June Nina Olson from the National Taxpayer Advocate told Congress that the current Offer in Compromise (OIC) program discourages taxpayers who would legitimately qualify for this method of payment to the IRS.

Taxpayers accepted into the OIC program have dropped since 2001. Reasons vary as to why taxpayers may be reluctant to request this particular type of agreement with the IRS. In Olson’s report, recommendations included everything from examining the current application process to adequate staffing within the department.

Qualifying for the program is based on a reasonable collection potential (RCP), part of which is based on anticipated future income. Yet today’s market is riddled with company layoffs and financial upheaval not seen in decades. So how accurate could your anticipated future income be?

How can you determine if the upcoming changes could help you achieve the best tax settlement with the IRS? Avoid tax representation firms that have been sued for misrepresenting how they could help consumers through Offer in Compromise. Rely on a reputable firm of tax lawyers with excellent customer ratings.

Offer in Compromise isn’t always the best agreement to pay your tax debt to the IRS. An experienced tax attorney will put your financial feasibility first, and they’ll be by your side during payment negotiations with the IRS.

The recession has everyone scrambling to maximize income, whether it is a family clipping coupons and trying to cut costs or a business laying off workers and attempting to renegotiate their debts. Even the government is trying to bring in revenue.

To this end, the Internal Revenue Service recently announced a plan to give offshore tax evaders a break on the amount they owe if they will come forward and pay.

A story that appeared on the New York Times Web site offers details on how the government agency is offering the deal to try to lure individuals who have hidden assets in secret accounts overseas to pay what they owe before the government locates the assets.

If you owe back taxes to the IRS, shouldn’t you take advantage of the current economic climate to try to make the best deal you can to clear your tax debt.

Contact a professional tax attorney today to see if you may qualify for an offer in compromise or other negotiated tax settlement offer.