Tax Tip of the Week
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For the week of
FEBRUARY 1, 1999
Make an offer the IRS can’t refuse.
If you are unable to pay the Internal Revenue Service all the tax you owe, you may have a way out. This solution isn’t for those who are temporarily short of cash. It is for those who have a tax liability due to the government which exceeds all their assets and a certain amount of their future income.
This taxpayer benefit is referred to as "offer-in-compromise." It has been improved under recent legislation. The IRS is permitted to accept an offer-in-compromise when either of two circumstances prevail. If there is doubt about the actual tax liability owed by the taxpayer or doubt about the taxpayer’s ability to pay, the IRS will consider an offer.
Doubt about the tax being owed is usually a matter of facts and circumstances. The doubt about the ability of the taxpayer to pay is a matter of valuing the taxpayer's current assets and debts and determining future income and necessary living expenses.
The IRS is supposed to consider fairness and hardship when reviewing an offer. It must cooperate with those taxpayers who are making a good faith effort to pay their taxes.
If you have a tax liability question or need assistance with tax or financial matters, please call.
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and current tax information.
The information contained in this site is of a general nature and should not be acted upon in your specific situation
without further details and/or professional assistance.
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