IRS Tax Problems
How Can a Tax Professional Help Me With an Offer in Compromise?
Submitting an offer in compromise is an incredibly long and difficult process, but one that can be worth the arduous journey if you owe a great deal in outstanding taxes with little to no hope of ever paying them off. Having a tax debt resolution specialist on your side can definitely make the offer in compromise process go a lot faster and reduce the stress that goes with trying to settle your back taxes.
Working with a tax professional may seem cost-prohibitive, especially if your primary reason for opting for an offer in compromise is because you feel that your tax bill is going to induce or worsen financial hardship. Given the intense amount of work involved in the offer in compromise process, all the way from determining your eligibility to appealing rejected offers, it's prudent to have a tax professional handle the workload for you simply because it can be like a full-time job in and of itself. However, there are other reasons why you should work with a tax professional if you are considering an offer in compromise and how they can help you.
Tax Professionals Are Well-Versed in Your Settlement Options
You may be unsure what type of offer in compromise best fits your situation: doubt as to collectibility, doubt as to liability or effective tax administration. Tax professionals speak the same language as revenue agents and officers and can determine which type is the one you should apply for based on prior IRS decisions and your personal financial statement. What seems like a doubt as to collectibility offer may actually be one that is effective tax administration.
Additionally, if your situation isn't appropriate for an offer in compromise, they can also get you started on payment alternatives minus any confusion.
You'll Save Time and Only Have to Submit an Offer in Compromise Once
You'll have peace of mind that your offer in compromise package is being assembled correctly and less likely to get returned to you. You can't appeal a returned offer, only a rejected one. Because tax professionals know what your offer package needs to include and will go through each item on a granular level, you will be far less likely to have to spend more time sending back an offer package that got returned.
In the event that your offer in compromise gets rejected as opposed to returned, tax professionals also know what the Office of Appeals is looking for in an appeal and how to increase your chances of the offer going through.
Many Tax Professionals Have Contacts at the IRS
A major advantage you have in working with an established tax professional is that a vast majority of them have contacts at the IRS. This makes a huge difference in either expediting processing times or finding out more about what your offer package needs to increase your chances of it being accepted.
You Have Additional Counsel Through a Tax Professional if Your Financial Situation Changes
It can feel intrusive and scary to have the IRS check in on your financial situation, such as wanting to know more about how your children contribute to the household, or if a one-time increase in your income will be long-term. A tax professional will not only prepare your personal financial statement correctly and ensure that you have all of the required documents, but also counsel you on what you can do if your financial situation changes for better or worse. Your eligibility for payment plans and submitting an offer in compromise can drastically change and leave you with fewer options. The tax professional's job is to advocate for you and find a way to resolve your tax issues using all legally possible avenues.
Submitting an offer in compromise is a long and daunting process. When you entrust a tax professional to handle this paperwork for you, you can rest assured that they will help you every step of the way from assembling your documents to appealing your rejection. You also have the added benefit of their professional networks, which include current and former IRS employees as well as other tax professionals, who can share knowledge of successful offers in compromise.
Lee Reams II, writes for TaxBuzz, a tax news and advice website. Reach him at [email protected] or on LinkedIn.
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