There are various issues that could cause difficulties for you in making your federal income tax payments.
The Internal Revenue Service (IRS) can help resolve the debt through an Offer in Compromise, but can you qualify for this agreement?
What it is
An Offer in Compromise is an agreement between a taxpayer and the IRS. It enables the taxpayer to clear his or her tax obligation through an agreed-upon payment plan. Your attorney can help you maximize your bid for tax relief. The agreement provides a way for you as the taxpayer to pay less than the amount owed.
Who can qualify
The IRS will often approve an Offer in Compromise if the amount you present is the most the agency can expect to receive in a reasonable length of time. You are eligible to apply if you meet the following requirements:
- You have filed all tax returns and made all estimated payments
- You are not in bankruptcy
- You have a valid extension for your current return
- You are an employer who has made tax deposits for the current quarter and the past two quarters
How to pay
There are two payment options to consider. If you choose to pay in a lump sum, you must first submit 20% of the total offer amount. You must then submit the balance in five or fewer payments. Alternatively, you could provide an initial payment when you apply. While the IRS considers your offer, you would continue with monthly installments, and, if the agency approves, continue in this manner until you have paid the debt in full.