When it comes to tax law in Georgia, there are a lot of things that many people don’t understand. One of the most confusing concepts is offers in compromise.
What are offers in compromise?
This is an agreement in tax law that’s usually between a taxpayer and the IRS that resolves the taxpayer’s tax liability. In other words, it’s a way to settle your tax debt for less than the full amount that you owe. Offers in compromise are not right for everyone. In order to qualify, you must prove that you can’t pay your full tax liability and that an offer in compromise is the best way to settle your tax debt.
How do offers in compromise work?
The first step is to use the IRS’ Offer in Compromise Pre-Qualifier tool to see if you meet the initial criteria. If you do, you’ll need to fill out a formal application and submit it to the IRS. Once your application is received, the IRS will review your financial situation and make a determination. If your offer is accepted, you’ll need to make a lump sum payment or set up a payment plan.
If your offer is rejected, you can appeal the decision or try to negotiate a different settlement agreement that is acceptable to both parties.
Are offers in compromise right for you?
Offers in compromise are not right for everyone. If you can’t afford to pay your tax liability in full, an offer in compromise may be a good option for you. However, offers in compromise are difficult to qualify for, and the process can be lengthy. If you’re not sure if an offer in compromise is right for you, someone with a strong background in financial matters and tax procedures may be able to help.
If you’re considering an offer in compromise, it’s important to understand the process and what you need to do in order to qualify. Just ensure to prepare yourself with the proper tax documentation before moving forward to avoid any stressful and unnecessary tax problems down the road.