The road to tax relief can sometimes be traveled by filing an Offer in Compromise, or OIC, with the Internal Revenue Service. An OIC is a proposal to the IRS. You are asking them to allow you to pay less than what you owe. Example: You owe the IRS $125,000 and you file an OIC with an offer to pay $35,000. If they accept it you will only pay $35,000 and your IRS debt will be permanently settled.
Offer In Compromise – Assets
In order to solve your tax problems with an OIC you will need to fill out two IRS forms, Form 656, and Form 433-A (OIC). Assets are what you own. They can be either a purchase or a gift from someone. The most important thing about assets as they relate to tax relief is the equity in an asset. Equity is the difference between how much your asset is worth and how much you owe on the asset. In other words equity is the value of the asset minus the debt you owe. If you buy a car with a value of $15,000 and you owe $10,000 the equity is, you guessed it, $5,000.
Offer in Compromise – Income and Expenses
Step One of our five step process to tax resolution is Assets Put hyperlink to that blog, which we covered in the previous blog. Step Two is Income and Expenses which we will cover in this blog. Recall that the amount of your offer to the IRS will be a combination of assets and discretionary […]