With the effects of the recession continuing to linger, many taxpayers of all income levels are finding it difficult to fully pay their tax bills. One avenue available to taxpayers who cannot pay their federal tax bills is the Offer-in-Compromise, whereby a taxpayer offers to pay less than what is owed and the Internal Revenue Service (IRS) accepts the offer in full satisfaction of the tax liability.
To qualify for an Offer-in-Compromise, a taxpayer must be able to demonstrate one of three things:
1. Doubt that the outstanding tax bill can be collected in full,
2. Doubt that the assessed tax bill is correct, or
3. That an exceptional circumstance exists.
Under the new terms announced by the IRS, the financial analysis used to determine which taxpayers qualify for an Offer-in-Compromise will now be more liberal. IR-2012-53. The IRS will review only one year of future income for offers paid in five or fewer months, down from four years, and two years of future income for offers paid in six to 24 months, down from five years. This will allow some taxpayers to settle their tax issues in as little as two years, compared to four or five years in the past.
Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.
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Yes, I heard about those news too. Anyway, I think it is a good idea to tell people that not everybody can apply for an Offer in Compromise settlement. There are a few requirements, and it’s always a good suggestion to go for some professional consultation before applying, don’t you think?