April 2022

Understanding the Nature and Benefits of Tax Compromise

A Tax Compromise is an agreement between the taxpayer and the government in which the taxpayer offers the government less than what they owe, in exchange for a smaller sum. According to Oregon’s best tax attorney, if both parties can agree on the terms, a Tax Compromise can be a great way to avoid litigation and to pay your taxes in installments. However, not every tax liability is favorable for a Tax Compromise. Here are some tips on how to make the most of it.

First, the taxpayer should decide whether he or she is financially unable to pay the full amount of the tax bill, or if a compromise is the only way to reduce his or her liabilities. Taxpayers should also consider the risks involved with this process. A Tax Compromise application can be denied if the Commissioner is incompetent or the taxpayer cannot pay the full amount. If the taxpayer cannot pay the entire amount, he or she can try to sue the BIR or file an administrative claim for refund.

Taxpayers should consider using a Tax compromise if their financial situation has worsened and they are unable to pay the full amount. These offers will usually be accepted by the IRS only if the taxpayer’s financial circumstances allow it. Taxpayers should be aware that they must stay in tax compliance for five years to take advantage of the Tax Compromise. And the IRS will accept the offer only if it is greater than the amount they would otherwise collect.

To avoid the IRS rejecting the Offer in Compromise, a taxpayer should know his or her monthly disposable income and net equity. It is essential to know that you can afford to pay the proposed settlement amount. Almost all taxpayers seeking to settle their tax debts use the services of a Tax Compromise attorney to ensure the accuracy of the assessment and explore alternative solutions. Moskowitz LLP has helped many taxpayers successfully negotiate their tax liabilities. The firm has many experienced tax attorneys to assist you with the process.

A Tax Compromise is not an easy process. The IRS will usually reject an Offer in Compromise if the taxpayer does not have any assets to offer. However, if a taxpayer can pay the lower amount of money, the IRS will be willing to accept it. This is because the IRS will stop levies and garnishments while the Offer in Compromise is being reviewed. Furthermore, if the lower tax balance is paid, the IRS will release tax liens. By using a payment plan, a person can avoid tax liens altogether.

An Offer in Compromise is a legal process through which the IRS agrees to forgive a portion of a taxpayer’s tax debt in exchange for a lower payment. However, in the end, an Offer In Compromise may result in a tax refund if the terms of the agreement are met. If rejected, an OIC can be appealed. This is done by filing Form 13711, a Request for Appeal of Offer in Compromise.