Getting a Compromise for Your Tax Debt Using "Doubt as to the Liability" as Reason
An Offer in Compromise (OIC) is not something that IRS simply accepts to settle tax debts. This is when a taxpayer will propose to an IRS a compromise to pay tax debt but in a lesser amount. A taxpayer might be granted from this proposal if IRS finds out worthiness for tax debt relief.
IRS needs to be given a substantial proof that an offer in compromise is feasible in favor of a tax collection. The taxpayer will deal with the IRS on the matter of proving the difficulty of paying tax debt in full. He/she will be needing help from a tax specialist to be able to present this case to IRS credibly.
The tax specialist will ensure that tax debt negotiation is achieved through an offer in compromise. This professional will be hired by the concern taxpayer with this primary purpose. In such cases, a taxpayer may be in a financial difficulty, like death in the family, terminal illness, job loss, etc. These circumstances can be used as a main reason for taxpayer's inability to pay tax debt in full single payment.
IRS, on the other hand, will consider this situation, whichever is claimed, as a means a compromise. This compromise between IRS and taxpayer is based on the principle called "doubt as to the liability". Which means that the government doubts that taxpayer can pay tax debt in full. So they allow a compromise that taxpayer will be pay tax debts in a lesser amount.
This instance of tax debt relief, did not just crop up because of the recession. The principle behind an offer in compromise is relatively fair to any given situation. However, IRS does not just let a taxpayer away with this all the time. That is why it takes a good deal of tax specialists to handle the negotiations for a compromise.
It is understandable why IRS is wary about using the "doubt as to the liability" principle. Taxpayers and their army of tax experts might just be clever to get away with tax debt, there is always that possibility. That's why IRS simply doesn't give in to these people easily to avail compromise as a form of tax debt relief.
IRS needs to be given a substantial proof that an offer in compromise is feasible in favor of a tax collection. The taxpayer will deal with the IRS on the matter of proving the difficulty of paying tax debt in full. He/she will be needing help from a tax specialist to be able to present this case to IRS credibly.
The tax specialist will ensure that tax debt negotiation is achieved through an offer in compromise. This professional will be hired by the concern taxpayer with this primary purpose. In such cases, a taxpayer may be in a financial difficulty, like death in the family, terminal illness, job loss, etc. These circumstances can be used as a main reason for taxpayer's inability to pay tax debt in full single payment.
IRS, on the other hand, will consider this situation, whichever is claimed, as a means a compromise. This compromise between IRS and taxpayer is based on the principle called "doubt as to the liability". Which means that the government doubts that taxpayer can pay tax debt in full. So they allow a compromise that taxpayer will be pay tax debts in a lesser amount.
This instance of tax debt relief, did not just crop up because of the recession. The principle behind an offer in compromise is relatively fair to any given situation. However, IRS does not just let a taxpayer away with this all the time. That is why it takes a good deal of tax specialists to handle the negotiations for a compromise.
It is understandable why IRS is wary about using the "doubt as to the liability" principle. Taxpayers and their army of tax experts might just be clever to get away with tax debt, there is always that possibility. That's why IRS simply doesn't give in to these people easily to avail compromise as a form of tax debt relief.