For many people, debt owed to the Internal Revenue Service can be overwhelming. Often times the tax debt has resulted from people not withholding enough from their paychecks in an attempt to make ends meet during the year. Other times, people have withdrawn money from their retirement accounts in order to pay bills or purchase a much needed item. Still others end up owing more tax debt than they can pay because they own a business or had an isolated taxable event like the sale of a home.
Whatever the reason, if you owe the Internal Revenue Service more money than you can pay it is important to explore any and all options at your disposal to ease your tax burden. One of the first options to consider may be a bankruptcy, which in some cases can greatly reduce what you owe or even eliminate the debt all together. However, the laws surrounding taxes and bankruptcy are complicated and in general you may only discharge older taxes. The Oakland Law Offices of Melanie Tavare will provide you a FREE consultation to determine whether or not a bankruptcy may eliminate your tax debt.
If bankruptcy is not an option for you, an offer in compromise may be. An offer in compromise is a settlement with the Internal Revenue Service of your tax debt for less than the full amount owed. In general, the Internal Revenue Service will not consider an offer in compromise for tax debts less than $20,000.00. If you are eligible for an offer in compromise, it may be a useful tool in managing your tax debt.
Eligibility for an Offer in Compromise:
In order to be eligible for an offer in compromise, you cannot be in an active bankruptcy proceeding. In addition, you must be unable to pay the full amount of your tax debt within a prescribed amount of time in order to be eligible. If the Internal Revenue Service believes you have the assets or income to pay your tax debt in full, your offer will be rejected.
Process:
At the Law Offices of Melanie Tavare, the first step in the offer in compromise process is the initial client consultation. It is important to bring to this consultation paycheck stubs for the last three months as well as a list of your living expenses and assets. With this information, attorney Melanie Tavare will be able to give you an estimated repayment amount and inform you about the rest of the offer in compromise process.
Filing Fee and Other Requirements:
In order to file an Offer in Compromise you must include with your offer a non-refundable filing fee of $150.00. In addition, you must also include your first monthly installment payment. You must continue to make these installment payments while your offer is being considered.
Future Tax Debt:
It is important to stay on top of your future tax debt once an offer in compromise is accepted. For your offer in compromise to be successful you must file and pay all taxes due for the five year period following the acceptance of your offer. If you fail to pay your subsequent tax debt in full by the deadline your offer can be terminated and you will once again owe the tax debt in full, including penalties and interest.
If you owe a substantial amount of money to the Internal Revenue Service contact the Law Offices of Melanie Tavare today to see if an Offer in Compromise is right for you.
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