Being unable to pay one’s tax bill can be defeating. A lot of Connecticut residents are struggling financially right now, and the last thing they need is to have penalties and fees attached to tax bills that are already outrageous. Thankfully, those who do end up owing more than they can pay do have options to ease their financial situation. One such option would be seeking an Offer in Compromise.
An OIC is a deal reached between the Internal Revenue Service and a taxpayer for the taxpayer to pay less than what he or she owes. This option is not available to everyone. There are specific qualifications that must be met by the taxpayer, such as the ability to show a lack of the funds to meet one’s full tax liability through other means, like an installment agreement.
When it comes to setting the terms of an OIC, it is the taxpayer who makes the offer with terms he or she feels are reasonable. The IRS will review the proposal and accept or reject it based on what it calculates to be the reasonable collection potential. To determine the RCP, the IRS will look at all of one’s assets, not just how much cash to which one has access.
Connecticut residents who are unsure if they meet the qualifications for an Offer in Compromise can turn to an experienced tax attorney for assistance in determining their eligibility. Legal counsel will also have the ability to help one come up with terms the IRS is most likely to accept. If for some reason one’s offer is rejected or returned, legal counsel will be able to help one appeal or find another way to address one’s tax obligation.