Each year, many people find that they owe the Internal Revenue Service more than they can pay. If this happens to you, you may find IRS relief from taxes by asking for an offer in compromise. Here are some of the details.
To apply for an OIC or offer in compromise, one must fill out some special forms which asks the IRS to accept your payments, even though they total less than what you owe. Yet, if you can pay these taxes through any other means, there is not much chance of your offer being accepted.
The guidelines that the Internal Revenue Service uses for accepting offers in compromise are based on RCP or reasonable collection potential. With RCP, the government takes things into account such as total assets. This includes your house, autos, and money in your bank accounts. They also take into account your future income and basic needs.
The Internal Revenue Service may accept your offer, and you will have two choices for payment. A lump sum payment agreement allows you to satisfy the tax bill in 5 months time. When you apply for the OIC, you have to enclose 20 percent of the total as the first payment. Most people must add $150 for application fees. Your money is not refunded if the OIC is refused. Instead it is used to pay on your taxes.
If you cannot pay your OIC in five payments, you may choose an installment payment option. This allows you to stretch your payments until the offer amount is paid in full. When you apply for an OIC you must make monthly payments as though the offer has been accepted. If you are turned down, the money is used to reduce your tax bill.
You may not have to pay the $150 application fee if you qualify as low income. Also, if there is doubt as to your actual liability in the taxes owed, they may not ask for a fee. In any manner, a first payment is required in all cases.
If you find that you owe more than you can pay on your federal income taxes, there is no reason to panic. You may be able to pay with an offer in compromise. You may pay the amount in 5 months. However, the installment option allows you to pay on a monthly basis until the entire amount has been paid. It is vital to make all payments on time, and a professional tax person can best advise you on IRS relief.
To apply for an OIC or offer in compromise, one must fill out some special forms which asks the IRS to accept your payments, even though they total less than what you owe. Yet, if you can pay these taxes through any other means, there is not much chance of your offer being accepted.
The guidelines that the Internal Revenue Service uses for accepting offers in compromise are based on RCP or reasonable collection potential. With RCP, the government takes things into account such as total assets. This includes your house, autos, and money in your bank accounts. They also take into account your future income and basic needs.
The Internal Revenue Service may accept your offer, and you will have two choices for payment. A lump sum payment agreement allows you to satisfy the tax bill in 5 months time. When you apply for the OIC, you have to enclose 20 percent of the total as the first payment. Most people must add $150 for application fees. Your money is not refunded if the OIC is refused. Instead it is used to pay on your taxes.
If you cannot pay your OIC in five payments, you may choose an installment payment option. This allows you to stretch your payments until the offer amount is paid in full. When you apply for an OIC you must make monthly payments as though the offer has been accepted. If you are turned down, the money is used to reduce your tax bill.
You may not have to pay the $150 application fee if you qualify as low income. Also, if there is doubt as to your actual liability in the taxes owed, they may not ask for a fee. In any manner, a first payment is required in all cases.
If you find that you owe more than you can pay on your federal income taxes, there is no reason to panic. You may be able to pay with an offer in compromise. You may pay the amount in 5 months. However, the installment option allows you to pay on a monthly basis until the entire amount has been paid. It is vital to make all payments on time, and a professional tax person can best advise you on IRS relief.
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If you are billed for more taxes than you have monetary resources, IRS relief is easily available. Request an Offer in Compromise to ease your tax obligation.
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