Tustin, CA Offer in Compromise Service

Offer in Compromise in Tustin, CA: Finding Relief from Tax Debt

Are you struggling with overwhelming tax debt in Tustin, CA? If you find yourself unable to pay your tax liabilities in full, an Offer in Compromise (OIC) could provide a path to financial relief. Tax Alliance is here to guide you through the process and help you explore this potential solution to your tax debt challenges.

Understanding Offer in Compromise

An Offer in Compromise is an agreement between a taxpayer and the Internal Revenue Service (IRS) that allows the taxpayer to settle their tax liabilities for less than the full amount owed. This option can be life-changing for individuals and businesses facing financial hardship or other circumstances that make paying the full tax debt unfeasible.

Who Qualifies for an Offer in Compromise?

While an OIC can offer significant relief, not everyone qualifies for this option. To be eligible for an Offer in Compromise, you must meet certain criteria set forth by the IRS:

1. Inability to Pay in Full: Taxpayers who can fully pay their tax liabilities through an installment agreement or other means generally do not qualify for an OIC.
2. Filing Requirements: You must have filed all required tax returns and received a bill for at least one tax debt included in the offer. Additionally, you must have made all required estimated tax payments for the current year.
3. Business Owners: If you are a business owner with employees, you must have made all required federal tax deposits for the current quarter and the two preceding quarters.

Reasons for Submitting an Offer in Compromise

The IRS may accept an Offer in Compromise based on one of the following reasons:

1. Doubt as to Liability: If there is a genuine dispute regarding the existence or amount of the correct tax debt under the law.
2. Doubt as to Collectability: When the taxpayer's assets and income are less than the full amount of the tax liability.
3. Effective Tax Administration: If requiring payment in full would create an economic hardship or would be unfair due to exceptional circumstances, even though the tax debt is legally owed and can be collected in full.

Forms and Application Process

When submitting an Offer in Compromise, taxpayers must use the most current version of Form 656, Offer in Compromise, along with Form 433-A (OIC) or Form 433-B (OIC), depending on their individual circumstances. Additionally, certain taxpayers may need to submit Form 656-L, Offer in Compromise (Doubt as to Liability).

Application Fee and Payment Options

In general, taxpayers must submit an application fee along with their Offer in Compromise. However, there are exceptions to this requirement, such as when the offer is based on doubt as to liability or when the taxpayer qualifies for the low-income exception.

There are two payment options available for Offers in Compromise:

1. Lump Sum Cash Offer: Payable in five or fewer installments within five or fewer months after acceptance. Requires a nonrefundable payment equal to 20% of the offer amount.
2. Periodic Payment Offer: Payable in six or more monthly installments within 24 months after acceptance. Requires the first proposed installment payment along with the application.

Suspension of Collection and Offer Terms

While an Offer in Compromise is pending, the IRS suspends collection activities. If the offer is accepted, the taxpayer must fully comply with tax laws, and any refunds due may be kept by the IRS. However, if the taxpayer defaults on the terms and conditions of the offer, the IRS may terminate the agreement and resume collection activities.

Right to Appeal and Return of an Offer

If the IRS rejects an Offer in Compromise, the taxpayer has the right to appeal the decision within 30 days. However, if an offer is returned due to missing information or other issues, there is no right to appeal.

Additional Information and Resources

Taxpayers can find step-by-step instructions and all necessary forms in the Offer in Compromise Booklet (Form 656-B). The IRS also provides online tools, such as the Offer in Compromise Pre-Qualifier, to help taxpayers determine their eligibility and prepare a preliminary proposal.

Why Choose Tax Alliance for Offer in Compromise Assistance?

At Tax Alliance, we specialize in helping taxpayers in Tustin navigate complex tax issues and find solutions to their tax debt challenges. Our experienced team understands the intricacies of the Offer in Compromise process and will work tirelessly to help you achieve relief from your tax debt.

Contact Tax Alliance Today

If you're considering an Offer in Compromise in Tustin, CA, don't hesitate to reach out to Tax Alliance for personalized assistance. Visit our website TaxAlliance.com or call us at 800.987.3051 to schedule a consultation and take the first step toward financial freedom.

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