Offer In Compromise
An offer in compromise is a settlement of state or federal tax liability. There are three types of offers:
- Doubt as to Collectible Offer In Compromise – This type of offer is based upon your ability to pay monthly, as well as a calculation concerning your equity in assets. We see many clients who unfortunately offer the IRS a flat settlement amount without regard to their income/expenses/equity in assets. Please see us to see if you qualify for an offer in compromise.
- Effective Tax Administration – This type of offer is based upon hardship. The IRS still requires filling out the full Offer in Compromise paperwork. However, we argue that while the client has the ability to pay in full, doing so would be unduly burdensome. These types of offers are rare. Circumstantial evidence, health concerns, and the age of the taxpayer are some of the many factors to be considered when applying for this type of offer.
- Doubt as to Liability – This type of offer deals with improper assessment. Has the IRS assessed you wrongfully? Has the IRS asserted a liability that someone else is responsible for? The Doubt as to Liability offer is based on fact versus financial criteria. If you feel you were wrongfully assessed, please contact us directly to see if you qualify.
If you qualify, we will fight for you to settle your tax debt. First and foremost, we will evaluate your situation to determine if we think you can qualify for an offer in compromise before discussing settlement options. We will complete a full financial analysis, history analysis, as well as a personal analysis to see if you qualify for a reduction in your tax debt.
A tax lien is a security instrument the Internal Revenue Service and state taxing authorities use to obtain security for tax debt that is owed. A tax lien can cause significant problems with your credit, ability to obtain a loan, ability to obtain a line of credit or purchase a piece of property. A lien also attaches to any real property you own.
A tax lien is the first line of defense the IRS uses when processing an assessment against a taxpayer. The lien is also public record. Therefore, you have probably had 3 or 4 companies calling you as it relates to the lien. Be wary of any company calling you and claiming they can get the lien released immediately. There are special instructions and methods used in order to facilitate a release and the IRS WILL NOT grant a lien release for no particular reason. There are options you have as it relates to the tax lien and we can assist you to explore these options.
Options regarding the tax lien are as follows; withdraw request, release request, subordination of the tax lien, and a discharge of the tax lien in the case of property issues. Please call us directly for more information as each case is different and requires special attention.
Levy/Wage Garnishment Release
A tax levy is much different from a tax lien. A levy can freeze your assets such as bank accounts, wages, and social security income. An individual levy can leave you bewildered, wondering how you are going to pay rent, your utility bills, or even put food on the table. The IRS and state taxing authorities usually send out a set of specific notices as it relates to your tax bill prior to sending out a levy notice to your bank or employer. The IRS and State taxing authorities can levy and garnish wages. Some wage garnishments are irreversible but may be lowered.
Be choosy when deciding who to represent you as it relates to a levy. Be wary of anyone informing you the levy can be released within 24 hours. There are specific rules at it relates to a release of levy.
Contact us immediately if you have been levied, or garnished. We can help walk you through the situation and deal with the taxing authorities on your behalf.
IRS Payment Plans
There are several different payment plans available to both business and individual taxpayers. The IRS and State authorities have threshold amounts to qualify for certain types of agreements. The IRS also requires financial information to structure certain plans if the tax liability does not meet the threshold requirement. A few types of agreements require different substantiation, and possibly even a 2 year review. Further, certain expenses may not be allowable. Partial payment plans, seasonal agreements, increases in agreements over time, and balloon payments are all different types of agreements that may require different substantiation. If the statues are going to fall during the agreement the IRS is a lot stricter when it comes to allowable expenses and the length of the agreement. Of course, your standard payment arrangement will pay the liability in full over time, or by way of a streamlined or express agreement.
Please get in touch with us immediately and we will give you the best option to fit your budget, fit your financial picture, and account for any and all statutes and timelines on the account. If we accept you as our client, we assure you there will be a plan suitable to your needs.
Cancellation of Debt Income
Taxpayers in the United States may have tax consequences when debt is cancelled. This is commonly known as COD (Cancellation of Debt) Income. According to the Internal Revenue Code, the discharge of indebtedness must be included in a taxpayer's gross income. There are exceptions to this rule, however, so a careful examination of one's COD income is important to determine any potential tax consequences.
Innocent Spouse Relief
Innocent Spouse Relief is a program the IRS initiated to grant discharge of taxes owed by one person of a married couple. This discharge is granted once it is proven that the other person in the relationship has tried to evade tax payments or been accused of another type of tax offense. If a taxpayer filed a joint tax return, but later discovered that his or her spouse understated taxes owed, was part of tax fraud, or committed a tax offense, he or she might be eligible for tax relief. For this to happen, it must be proved that he or she knew nothing of the offenses. This type of tax relief can also apply if your spouse has deserted you, leaving you with tax debts for which you are not responsible. You can be absolved of these tax debts if you were unaware of any tax fraud. After due consideration of the circumstances, you may qualify for this type of tax relief. How do you qualify as an innocent spouse?
If you meet the following requirements, the IRS may exempt you from paying taxes:
- You filed joint returns
- Your spouse or former spouse reported incorrect income on the joint returns
- When you signed the joint returns, you did not know of the inaccuracy, and had no reason to know
An Injured Spouse Allocation obtains tax refunds from joint returns that have been unfairly used for one person’s outstanding past debts. For example, if you filed for a joint return and the tax returns were used for paying off your spouse’s student loans without your knowledge, you may be able to reclaim your share of the money if:
- You aren’t personally required to settle the debts
- During the year in question, you had income reported on a Form 1040, had income taxes withheld from you, or made estimated tax payments
To qualify for innocent spouse relief, apart from the requirements mentioned above, you must file for it within 2 years of the date of the first IRS collection activity. The highly qualified experts at Taxoodle will completely analyze your situation and circumstances to determine if you’re eligible for Innocent Spouse Relief. With our team at your side, you won’t worry about complicated documentations and procedures. Simply supply us with the necessary information, and we will put you on the optimal path for eliminating this type of tax debt.