The stress that comes along with having tax debt one cannot pay can be overwhelming. Unfortunately, that stress is something numerous Massachusetts residents are feeling right now as many are struggling financially — for various reasons. The last thing anyone wants is to increase how much they owe the government by accruing interest, fees and other penalties for failing to pay their taxes. Thankfully, relief options are available to those who end up with tax bills they cannot afford to pay at all or all at once. An Offer in Compromise is one such option.
In short, an OIC is an agreement reached between a taxpayer and the Internal Revenue Service, allowing the taxpayer to pay less than what he or she actually owes. Not everyone will qualify for this type of relief. Only those who can prove that they lack the funds to meet their debt obligations will be able to strike this kind of deal with the IRS.
When it comes to the terms of an OIC, taxpayers are to submit proposals for what they feel is reasonable for their economic circumstances along with their OIC petitions. The IRS will then review the proposed terms and either accept or reject the offer. When deciding whether to approve an OIC, the IRS will look at all of one’s assets in order to determine if it could possibly collect more than what a taxpayer is claiming the ability to pay. If one has sufficient assets, the offer will not be approved.
Massachusetts residents who want to know if they qualify for an Offer in Compromise do not have to figure it out on their own. An experienced tax attorney will have the ability to review the details of one’s case in order to help one determine eligibility. If filing an OIC is deemed appropriate, legal counsel will also have the ability to assist one in setting the terms so that the offer is likely to be approved. If an OIC happens to be rejected or does not seem a good fit for one’s circumstances, one’s attorney may be able to help one appeal or consider other options for addressing the tax debt.