The Internal Revenue Service debt forgiveness program allows a taxpayer to eliminate a portion of tax debt that they owe. To qualify for this program, a taxpayer must fulfill several requirements set by the IRS. However, if they are approved, they can wipe out a large portion of debt that they would likely never be able to afford. If you need assistance applying for the IRS debt forgiveness program, you should consult with an experienced Sacramento forgiveness of debt attorney.
The NewPoint Law Group knows how unmanageable tax debt can negatively impact your personal and professional life and we are here to help you handle your tax situation. Our firm has represented residents of Sacramento and Roseville for decades, and we would be proud to represent you. To schedule a confidential legal consultation, call the NewPoint Law Group at 1-800 358-0305, or contact us online.
IRS Offer in Compromise Program
The IRS Offer in Compromise (OIC) program is a deal between a taxpayer and the IRS that allows the taxpayer to pay a smaller portion of the total tax debt they owe. The purpose of this program is to reach an agreement that serves the interests of the taxpayer and the IRS. If a taxpayer is approved for this debt forgiveness process, they can earn a fresh start without the burdens of crushing tax debt.
To ensure eligibility for the OIC program, you must meet the following requirements:
- Make sure you have filed all tax returns that you are legally obligated to file
- Present a bill for at least one tax debt that is considered for debt forgiveness
- Handle any estimated tax payments you may owe for the current year
- Meet all quarterly tax payments if you are an entrepreneur that employs workers
Failure to meet all of these requirements may lead to your OIC application being returned and any payments towards the OIC program being applied to your tax debt.
Additionally, there are other factors that the IRS considers when determining eligibility for the OIC program. For example, the IRS may look at the taxpayer’s income, expenses, assets, and their ability to pay their tax debt without receiving debt forgiveness. The IRS is likely to approve an OIC application if they believe it is their best option to collect as much of the debt as possible.
Before you file an application for the debt forgiveness program, you must ensure that you have exhausted all possible payment options to handle your tax debt. If you believe that you can afford your tax debt without using the OIC program, you should avoid applying.
To learn more about applying for the IRS debt forgiveness program, you should continue reading and consider speaking with an experienced California tax attorney.
How to Apply for IRS Tax Debt Forgiveness
It is important to use the correct forms when applying for the IRS tax debt forgiveness program. If you are filing as an individual, you must use Form 433-A. Filing as a business requires the use of Form 433-B. If you decide to file individual and business tax debt together, you must use Form 656. There is also a non-refundable $186 application fee that must be submitted when you file.
There are two payment options that you can choose to pay off the remainder of your tax debt if your application is approved:
- Lump Sum Cash Payments. To choose lump sum cash payments, you must make an initial payment of 20% of your offer in compromise. If the IRS accepts your offer, you have a maximum of five payments to clear the rest of the debt.
- Periodic Payments. To request periodic payments of your tax debt, you must pay a portion of the debt with your application. If the IRS accepts your offer, you can continue with the monthly payments. It is important to note that while you wait for the results of your application, you must continue to make monthly payments towards the debt.
If you meet certain requirements that classify you as a low-income taxpayer, you will not have to pay an initial payment or continuous payments while waiting for the acceptance of the agreement.
There are several other factors to consider when filing for the OIC program. For example, the IRS may issue a federal tax lien on your property while your application is being evaluated. Our firm is here to ensure that you understand all the consequences of applying for the IRS Offer in Compromise program.
Our Roseville Debt Forgiveness Lawyers are Ready to Work with You
If you are having difficulty managing your tax debt, you should contact an experienced Roseville debt forgiveness lawyer today. The diligent legal team at the NewPoint Law Group has a wealth of experience helping clients apply for the IRS Offer in Compromise program, and we can help you determine whether you qualify for the program. To schedule a confidential consultation to discuss your options, contact the NewPoint Law Group at 1-800 358-0305.