The break you’re in need of may be on its way if you’re struggling with back taxes. The Internal Revenue Service Commissioner announced an initiative to help taxpayers get a fresh start with their tax liabilities on February 24, 2011. One possible way of reducing your past tax liabilities and avoiding IRS tax liens is by applying for an Offer in Compromise (OIC).
An Offer in Compromise is an agreement made between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. Perhaps you were considering an Offer in Compromise but were unsure if you’d qualify. Maybe an offer you submitted was previously rejected. Under the new initiative, the IRS is now offering an expanded Streamlined Offer in Compromise Program.
The newly expanded OIC program will now allow taxpayers with annual income of up to $100K.The new program also doubles the allowable tax liability from $25K to $50K. Offers in Compromise are subject to IRS approval and they will analyze your income and assets. Another perk of the expanded Streamlined OIC Program is the IRS will be making fewer requests for additional financial information. They will also offer the option to provide information by phone rather than by mail. Lastly, they will give more flexibility when considering a taxpayer’s ability to pay. With the flexibility of the new program, more taxpayers will be able to get a “fresh start” in regards to their tax debts. However, the IRS still urges individuals to be aware of promoters who advertise that IRS debts can be settled for “Pennies on the dollar.” These promoters often charge high fees with little to no results.
Even if you feel you may not qualify for this tax settlement option, talk to one of our licensed tax experts at Professional Tax Resolution today. There are other tax settlement options, and we are glad to discuss them with you.
