A lot of people owe back taxes—sometimes more than they can reasonably pay. In this ebook, we’ll go over the fundamental elements of this unique installment agreement and give you the knowledge you’ll need to help prepare them effectively for your clients.
An Offer in Compromise is an agreement between a taxpayer and the government to settle a tax liability by paying less than the full amount owed. The IRS may accept an offer when it is not likely that the tax liability can be collected in full and the offer amount reflects what could be collected over a reasonable period of time.
The IRS places certain delinquent tax cases in a “currently-not-collectable” (“CNC”) status after its agents have determined that there is Tno ability to collect the taxes from the delinquent taxpayer.
This IA is guaranteed to you under the law so it is easy to obtain. However, it is only for those taxpayers that owe 10,000 or less. Understanding the specific requirements and what forms are required is important to get you started in the process of paying back your taxes over time.
A tax audit may be an intimidating experience as you must be prepared to explain the nature of your income an substantiate the expenses and deductions claimed on your tax return. It is likely that the examination of one tax return may lead to other tax years being opened for audit. Additionally, in order to properly defend yourself, you may be required to have an extensive knowledge of the tax codes and regulations.