With so many people living in Portland, it is impossible for the IRS to go after every delinquent account. While the IRS does what it can to recover outstanding balances, it is sometimes not enough, as its limited resources are stretched thin.
As a result, smaller past-due accounts may be able to settle debt with less than what was due. This settlement program is called an Offer in Compromise.
Making an Offer in Compromise that both works for the filer and would be agreed to by the IRS requires some knowledge of both personal finances and IRS policy. The average person is not likely to successfully present and negotiate an arrangement the IRS would approve, and that would not cause an undue financial burden.
With the support and representation from our trusted tax experts, you can expect experienced guidance to help you navigate this process successfully.
Dealing with the IRS can be difficult for many taxpayers, mainly because they do not understand tax law or the programs available. The Portland tax attorneys at Instant Tax Solutions are here to help.
With our many years of experience, we are familiar with the process of submitting an Offer in Compromise. Reach out to us by completing our online form or calling (888) 363-8958.
Portland Offer in Compromise Help
The IRS doesn’t have the resources to ensure everyone pays what they owe on their taxes, and they know that some individuals aren’t realistically able to pay in full. The IRS, therefore, is willing to accept a reduced amount of back taxes in exchange for timely payment, allowing them to focus resources elsewhere.
An Offer in Compromise is a legitimate option for those who cannot pay their total owed amount or can prove that the amounts they owe to the IRS present a significant financial burden.
Preparing and submitting documentation to the IRS can be a daunting process. But, with the help of an experienced tax professional by your side, you can expect knowledge and guidance on what is needed in your application for an Offer in Compromise.
Referred to as an OIC, an Offer in Compromise can come with its own challenges before being approved by the IRS. When they receive an offer, they consider two major factors:
- Is this offer in line with our agency’s financial goals?
- What burdens are preventing the taxpayer from paying the total amount?
To make it simple, whatever is stated in the application must be reasonably justified and cannot fall outside the agency’s current policies. The IRS will mainly want to know why the applicant cannot pay what is owed immediately in full, either because of reasons of hardship or financial non-viability.
They must also consider how their own performance looks with respect to the agency’s financial targets for the year.
Due to the number of forms and challenges in presenting financial and logical arguments, it is a difficult situation for many taxpayers to navigate on their own. In many cases, the IRS will deny an Offer in a Compromise application if they believe it has a weak justification or is not in the agency’s best interest.
How Do I Submit a Portland OIC Agreement?
Receiving help to apply for an Offer in Compromise might be the ideal solution to resolve your outstanding tax balance. Working with a team knowledgeable in IRS tax relief programs is key to improving the chances of approval of your application.
To be considered for an OIC, all applicants must meet the following eligibility criteria:
- Are you current on filing taxes and any of this year’s estimated payments?
- Are you not currently filing for bankruptcy?
- Do you have a valid extension for those who are filing past the due date for the current tax year?
- Are you an employer, and if so, have you kept up with the most recent required tax contributions, including deposits and the deposits for the last two years?
If these requirements are met, the applicant can proceed and apply for their Offer in Compromise. Applications are found online and, once completed, require:
- Submission of all applicable forms and all required documents
- A $205 non-refundable application fee
- 20% of the proposed lump sum, or the first payment for their proposed monthly installment plan
To complete the OIC application package, applicants must include either Form 433-A (individuals) or 433-B (businesses), Form 656(s), all supplemental documents, the non-refundable application fee, and the initial payment applicable per each Form 656. Any processes of collection by the IRS are paused while your application is being processed.
It is important to know that submitting your application does not guarantee acceptance. After submission and review, the IRS will accept or reject your Offer in Compromise application.
If an application is rejected, the lump sum payments made to the IRS will be applied to the amount owed. Unfortunately, this still leaves the applicant in a worse situation than when they started.
As a result of the denial, they lost a portion of their liquid assets and still face collection, penalties, and accruing interest.
Low-Income Taxpayers
Some applicants can request a low-income certification, which waives the fee and initial payments. If you believe you qualify for low-income certification, please refer to the IRS website or one of the Instant Tax Solutions representatives to learn more.
What if I Am Going Through Bankruptcy
Taxpayers or businesses going through bankruptcy proceedings are ineligible to apply for an Offer in Compromise. The IRS recommends that any money owed should be included in the resolution of the bankruptcy proceedings.
During proceedings, taxpayers must continue to make any payments to the IRS or file for extensions. Once this is processed and a judgment is finalized, any updates to your owed amounts will be made without additional applications.
Portland Doubt as to Collectability
The IRS will review all Offer in Compromise applications received. They are looking for the applicant’s ability to successfully argue why payments made in installments or a lower amount than what is owed is a logical argument given their unique circumstances.
The IRS is considering applicants:
- All earned income
- All monthly expenses (if they are reasonable)
- Total value of property and other assets
- The applicant’s ability to pay within a reasonable time
Instant Tax Solutions is here to evaluate your financials as seen in the IRS’s eyes. When you apply with a justification to settle for less, it must be the most logical and sensible solution to resolve your outstanding balances.
With our help, you can bet that we will review all information and possible solutions to help with your outstanding debt.
The IRS expects applicants to pay as much as possible of their owed amounts. If they believe they can get more money out of you, they likely will refuse your application and proceed to traditional collections handled by their agents.
If you want to learn more about Offer In Compromise, check the IRS Frequently Asked Questions.
Appealing a Rejection Offer in Compromise
No one wants to receive the bad news that their Offer in Compromise application was rejected. However, applications are rejected often and for numerous reasons.
If you choose to file an appeal, it must be submitted no later than 30 days after receiving a rejection.
Appeals can quickly become complicated. To succeed, you must show that the IRS employees in charge of your application or the systems they used either drew erroneous conclusions or failed to follow the proper procedure.
The best thing to do is to work with someone who has walked others throughout this process. With our knowledge of IRS processes and by-laws, Instant Tax Solutions is ready to guide you on the steps to successfully file an appeal.
For example, applicants file their appeal by completing Form 13711. But, the IRS requires more than just filing a new form. Applicants will include why they disagree with the decision to reject their application and provide documentation showing how the IRS was in error.
Your application must include the following in an appeal:
- Contact information, like name, address, SSN/Tax Identification Number, and phone number
- A statement declaring that you are filing to appeal the decision for an Offer in Compromise made by the IRS
- Attach a copy of the rejection OIC letter
- Notating the tax period or year involved
- Breaking down what specific terms of the rejection letter you do not agree with
- Evidence of rules, policies, or proper procedures that weren’t adhered to in the processing of your request
- Any additional information you want to be considered as part of your appeal
- The specific statutory law or cause of action, if any, on which you are relying and
- Your signature on the written protest, stating that under penalties of perjury, it is true, correct, and complete
Missing Information on an Application
If an application is missing information or the applicant has since filed for bankruptcy, an Offer in Compromise application is returned. Unlike a rejection, when an application is returned to the sender, there is no possible appeal, and it must be resubmitted with the missing documents.
Applications returned because of a bankruptcy proceeding cannot be resubmitted and must be resolved in the courts.
Additional Assistance Available from Our Tax Experts in Portland
Apart from submitting an Offer in Compromise, our experienced tax professionals will prepare strategies and provide guidance to help you avoid any upcoming tax burdens. Our services are designed to help you get all your finances in order and break the cycle of unpaid tax balances and debt.
Our team can also serve as your representative through any communications involving the IRS. Our goal is to help you find tax relief with the options that are available to you. Some of these options can include:
- Adjusted tax assessments, identifying errors, or filing amended returns
- Creating a resolution of other outstanding balances, depending on what is owed
- Removing a levy
- Lien withdrawal, subordination, or discharge of property
- Penalty and interest abatement (a good option for first-time offenders)
The team at Instant Tax Solutions is ready to see which forms of assistance can help your case!
Get IRS Offer in Compromise Help From Our Experts
Owing money to the IRS is a frightening situation to be in. The last thing any taxpayer wants is to see collectors knocking on their door and requesting money they do not have.
An Offer in Compromise presents a viable solution for many who cannot pay the total amount at once. While the process can be complicated, with the help of our tax professionals, you can expect quality service as you navigate this process.
If you would like to learn more about how we can help you find tax relief, give us a call at (888) 363-8958 or reach out to us online by contacting us online.
