Do you have unpaid tax debt with the IRS or the State of Maryland? If you cannot afford to pay your debt in full you may qualify for an Offer in Compromise. Securing an Offer in Compromise can help you to get out from under significant financial debt by paying pennies on the dollar to the government. Contact the tax attorneys at Gabaie & Associates to find out if you qualify for an Offer in Compromise.
What is an Offer in Compromise?
An Offer in Compromise is a tool that allows taxpayers settle their tax liabilities by paying less than the total amount of the debt they have accrued. The government agrees to settle a taxpayer's account - and wipe their slate clean - by accepting a lower offer. This process allows taxpayers to get out from under burdensome tax debts while the government collects a portion of the revenue owed.
Why Should I Request an Offer in Compromise?
Getting the IRS or Comptroller of Maryland to agree to an Offer in Compromise can allow you to pay significantly less than is due to satisfy your tax debts. The IRS generally has 10 years from the date of assessment to collect taxes. An Offer in Compromise can help to quell the consequences of having an outstanding federal tax bill.
Maryland, on the other hand, can attempt to collect unpaid taxes for the rest of your life. Any unpaid tax debt is subject to 12% interest. As a result, your Maryland tax debt can grow significantly over time. Your tax liability may grow so substantially that you can never realistically pay off your debts. Securing an Offer in Compromise can help to remove this burden and stop mounting tax debts.
Do I Qualify for an Offer in Compromise?
Not all taxpayers with unpaid tax bills will qualify for an Offer in Compromise. At the federal level, the IRS generally accepts only about 40 percent of the requests for Offers in Compromise it receives each year. In determining whether you qualify for an Offer in Compromise, the government will consider your unpaid tax debt, financial situation, assets, and (to some degree) your age and health. If the government thinks that agreeing to an Offer in Compromise is the best way to relieve your burden and collect revenue, they may be more inclined to approve your request.
Grounds for Approval of an Offer in Compromise
There are three official grounds on which the federal government will agree to an Offer in Compromise.
Doubt as to Liability
The government may agree to accept an Offer in Compromise if there is a legitimate and genuine dispute about your tax liability. This dispute could be about whether or not the debt actually exists, or regarding the amount of tax that is due.
Doubt as to Collectibility
The government may also agree to accept less than you owe if there is considerable doubt that you can pay the full amount of the tax liability. Your ability to pay your tax debt in full will be doubted when the full amount of your tax debt exceeds your income and assets.
Effective Tax Administration
The government has the authority to accept an Offer in Compromise when doing so would serve effective tax administration. In other words, the government can accept an Offer in Compromise if it is believed that forcing you to pay your debt in full would subject you to economic hardships or be inherently unjust. In order to secure an Offer in Compromise on the grounds of effective tax administration, you will have to prove that you have extenuating circumstances that make the full payment of your tax debt unfair.
Get the Help of an Experienced Tax Attorney
If you have unpaid tax liability and think that you may qualify for an Offer in Compromise, contact tax attorney Juda Gabaie for help. Hiring an experienced attorney to handle your request for an Offer in Compromise will increase the chances of approval.
Attorney Gabaie has extensive experience handling all federal and state tax-related matters, including negotiating Offers in Compromise with the IRS and the Comptroller of Maryland. We are confident that we can help you negotiate a favorable agreement with the government agency that is demanding payment from you. Call us today to request a free consultation and learn more.