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Offer in Compromise Help in Denver, CO

Understanding tax settlements and OIC

Dealing with the IRS is always an intimidating proposition. But when you owe them money you don’t have, the situation can be completely overwhelming. That’s why many try to ease their tax burden with something called an “offer in compromise.” But these agreements aren’t for everyone. Fortunately, True Resolve Tax Professionals in Denver, Colorado, has the experience to help you select the best way to ease your tax burden and ensure the best possible outcome.

What is an Offer in Compromise (OIC)?

An offer in compromise is an agreement between a taxpayer and the Internal Revenue Service to settle the taxpayer’s tax liabilities for less than the full amount owed. Why would the IRS be willing to accept less? Because, based on their experience with others in similar situations, they believe it’s the most amount of money they can realistically expect to collect in the shortest period of time versus alternative extended collection options where people tend to default.

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How an Offer In Compromise is calculated

Contrary to popular belief, an offer in compromise isn’t simply a number pulled out of thin air or a percentage of what you owe that you’re willing to pay. It involves a very calculated formula that takes into consideration the value of all your assets, your disposable income, and all available equity. The IRS knows your assets and what you’re worth sometimes better than you do. The easy way out? While these agreements may seem like the easy way out from a huge tax bill, they are anything but. Much like everything from the IRS, the offer in compromise program is very intricate and complicated. You must prove that you can not pay the total balance owed before the collection statute expires. If you don’t know what you’re doing, you can make a bad situation worse. And while it’s true the IRS has relaxed its rules and accepted an all-time high of roughly 40 percent of OICs in recent years, it means that even today, your chances of getting rejected are still around 60 percent.

Do you qualify for an Offer in Compromise?

An offer in compromise is not a viable option for all taxpayers, especially businesses. The IRS has a very strict qualification process for this program. For individuals, call True Resolve and we’ll be happy to assist in guiding you through the qualifying process. Or, you can use our Offer in Compromise Pre-Qualifier Tool to see if it might be an option for you. But even if you don’t qualify, there are other effective ways to ease your tax debt without creating a financial hardship. Here’s a list of options:

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Alternative tax settlement options for Individuals

If you don’t qualify for an offer in compromise, the IRS allows individuals to set up installment payments if they are unable to pay their tax burden in full. First, you will need to fill out an Installment Agreement Request Form 9465 — and the sooner the better because the clock is ticking. An installment agreement means you may have to adjust your tax withholding to ensure you are paying in enough. Or, you may have to make quarterly estimated tax prepayments to ensure you are meeting your tax obligations. There are several options available in setting up a payment plan. They are:

  • A Full Installment Agreement over time – This allows the tax debt to be paid back in full over a five or six-year period.
  • A Partial Pay Installment Agreement – This is based on your financial situation and best negotiated by an enrolled agent to help you determine what you can realistically afford.
  • Request a “Non-Collectible” status – This is for individuals who are already upside down in their day-to-day expenses each month.

Even with installment agreements, the IRS will often still assess penalties and interest charges. So it is imperative to negotiate an installment agreement that is fair to you. That’s why it’s important to talk to True Resolve’s team of licensed, IRS Enrolled Agents located right here in Denver, Colorado. Thanks to our years of experience, we can help you negotiate an installment plan that gets the IRS off your back without creating a financial hardship.

Alternative tax settlement options for Businesses

A business that is currently operating and owes tax debt does not qualify for an offer in compromise. But there are alternative settlement options for businesses in Colorado seeking back tax help. However, the terms for most business installment agreements tend to be more rigid, especially when the business owes back payroll taxes. The options for a business to set up an installment plan are:

  • A Full Installment Agreement over time – This allows the tax debt to be paid back in full over a five or six-year period.
  • A Partial Pay Installment Agreement – This is for businesses that may have equity but are unable to tap into it, and the monthly payments they’re able to afford will not satisfy the debt in full within the stated collection period.
  • Request a “Non-Collectible” status – This is for businesses who are already upside down in their day-to-day expenses each month and typically have no assets or equity to tap into.

The best thing an operating business that owes back taxes can do is to ensure they stay current with their tax obligations going forward. If a business continues to “snowball” their tax debt by not staying current, then the IRS is much more likely to consider options such as seizure and/or closing the business down. A certified, licensed enrolled agent like the tax professionals at True Resolve can help you negotiate an installment agreement that is fair to you and will satisfy IRS requirements. Get started today by filling out an Installment Agreement Request Form 9465 for your business.

Why you should always hire a Tax Resolution expert

The Internal Revenue Service is the most powerful and most intimidating collection entity in the country. They can seize property, bank accounts, garnish wages and more. The IRS can also be among the most difficult of creditors to deal with. That’s why it’s best to have an expert working for you on your side. True Resolve’s OIC acceptance rate is over 95 percent because we conduct a thorough pre-qualification with every one of our clients. If an OIC isn’t your best option, we have the experience to negotiate an installment agreement that won’t leave you in financial ruins. We don’t advertise tax debts resolved for “pennies on the dollar” because they simply don’t exist. If an offer sounds too good to be true, then it probably is. True Resolve strives to be upfront and honest while setting realistic expectations throughout the entire process. Talk to an enrolled agent at True Resolve today and see how we can help provide hope and peace of mind for your complicated tax issues.

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