Offer in Compromise

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Offer In Compromise

Owing money to the IRS can lead you to numerous negative consequences. However, it can happen due to many different reasons. Most people end up with owing debt to the IRS upon missing their tax filing deadlines. Even if you made an error when filing for taxes, and failed to correct it on time, you will end up with owing money to the IRS.

Regardless of the reason on why you are dealing with tax debt, the IRS provides you with few solutions to overcome the situation. Offer in Compromise is one such popular option available. This is where you will get into an installment agreement with the IRS. You will be getting an extended period of time to pay back the debt installments, in smaller amounts.

Our Offer Plan

Learning More About Offer In Compromise

Offer in Compromise helps thousands of taxpayers who struggle with tax debt every year. It provides an opportunity to negotiate with the IRS and settle outstanding tax debt. You can get the IRS to agree to pay a lower amount than what you owe. While paying a lesser amount than you owe, you will also get the flexibility to make your payments.

Assume that you are dealing with a tax debt of $60,000 with the IRS. This can be challenging because you don’t have a bank balance, or even assets worth $60,000. This is where you reach out to the IRS and say that you are not in a position to make the payments. Then the IRS will ask you to pay a lower amount, as installments. You will be provided with 3 years to make this payment. Even if you find it difficult to make the total payment within 3 years, you can go ahead with an Offer in Compromise. You should provide proof and show that you are an eligible candidate for it.

This is where you will need to contact the IRS and plead the case. For that, you will need to show proof for your income and assets. Moreover, you need to come to convince IRS that making the total amount you owe will lead you to extreme economic hardships. This is where you can negotiate and conclude that you will pay $20,000 to settle the outstanding amount of $60,000. If IRS agrees to it, you will be getting an Offer in Compromise.

Struggling Under Tax Debt? You May Qualify For An Offer In Compromise.

IRS Offer

Working With The IRS Can Be Tricky

Getting into an agreement with the IRS for an Offer in Compromise can be tricky. That’s mainly because you don’t have any legal obligations to settle the tax debt that you owe by making a lesser payment. As per the laws, you are entitled to pay the full amount that you owe in taxes. It is only up to the IRS to decide whether you are given a reward or not.
This is where you need to reach out to the IRS with a killer argument. It all depends on how successful you are with the argument. A professional can assist you with building such a solid argument. You can also get assistance with collecting all the documents that you need to show proof. This will help you to settle for a better agreement, where you will pay less than what you owe. We at XeroTax Strategies can help you with it.
Connect with us and we will help you to approach the IRS with a solid argument. We will increase your chances of getting an Offer in Compromise.


What If You Agree To The Notice Of Deficiency?

If you noticed that the IRS is correct, you should not challenge it. All you have to do is to complete the Form 5564, which is the Notice of Deficiency. Then you can send it to the agency that issued the Notice of Deficiency. After that, you can get a bill, which will contain the amount equivalent to your unpaid taxes. On top of that, you will have to pay penalties and interests for your late tax payment. You will also receive this bill if you don’t respond to the Notice of Deficiency within 90 days.

It is better if you can contact us at XeroTax Strategies after getting your Notice of Deficiency. We will evaluate your situation and provide information on what you should do. Give us a call today.


What Is A Notice Of Deficiency?

The Notice of Deficiency is a legal notice sent by IRS to inform taxpayers about their previous deficient tax payments. It can also inform taxpayers about lack of necessary funds. When the IRS discovers that the tax return of a taxpayer has omitted income information, they send the Notice of Deficiency. It clearly indicates that the tax payment made to the IRS is smaller than what it should be.

How can I possibly get a Notice of Deficiency? For each and every tax document you receive from financial institutions, employers, and lenders, the IRS will have a corresponding record. In other words, the IRS has completed and detailed information about your financials for the year. Once you go ahead and file for taxes, the IRS will cross-check your reporting along with records that they have. This is where they determine whether you have successfully reported all your tax obligations or not. If you fail to report all information, you will end up with getting a Notice of Deficiency.

The Notice of Deficiency can act in the form of a reminder document about forthcoming taxes. The IRS is usually sending this notice before assessing additional tax.

If you get a Notice of Deficiency, you will be confused on what to do next. Feel free to get in touch with us. We will help you to deal with the situation.

How It Work

How Does A Notice Of Deficiency Work?

The IRS will cross-check your tax filing and determine whether there is a deficiency. If a deficiency is noticed, they will go ahead and issue you with a pre-assessment letter. This pre-assessment letter is also called as the 30-day letter. It would inform a taxpayer like you that there is a deficiency in your filing. You can use it to appeal the assessment. If you decide to go ahead with the appeal, you will need to send it within 30 days of receiving the letter.

But if you don’t respond within 30 days, the IRS will go ahead and issue a Notice of Deficiency. The IRS will clearly outline all important details related to the deficient payment. You can find your unreported payments and all other calculations that determined the deficiency in it.

When you receive a Notice of Deficiency, you will have 90 days from the mailing date to challenge it by taking the case to the US Tax Court. Because of this, the Notice of Deficiency is often called as the 90-day letter. You will need to file a petition at the Tax Court, challenging the notice you received. In case if you have additional information to back up the claim, you will need to send them to the IRS as well. The IRS will not be able to proceed with any action during this 90 day period.


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