Offer in compromise is an effective medium of settling the outstanding debts of IRS without even paying the complete amount owed. Before making a compromise offer, it is essential to disclose all your financial assets and a valid proof of poor or no income in the future. In order to get rid of this tax problem, you need to be extra careful, and follow proper rules and regulations as prescribed under law. Further in this article, I have highlighted some essential tips that can help in dealing with the IRS Levy problem in an easy and lawful manner.
Full Account of Finances
While filing a compromise offer with IRS, you need to furnish proper documents regarding financial details. Apart from bank statements, you will have to provide proper information and documents giving a proof of all the properties and vehicles in your possession. This will help in giving the officials a proof regarding doubt to collectability, which is one of the most common forms of negotiation. It is generally a process that can prove that you are not in a condition to pay the fully owed debt.
Proof of Ability to Earn
The approval of your Offer in Compromise will mainly depend on your ability to earn proper income in the coming years and the collection potential. If there are particular reasons, justifying that you cannot earn money in the coming years, then you will be required to submit proper documents in proof of the same. Apart from the financial condition and the asset tally, the IRS problems officials look forward to comprehend a clear picture of the earning potential and the exact amount of money that can be collected by them. Therefore, you need to maintain a proper proof to justify the reasons of debt being left unpaid.
Always Have A Plan B
IRS department approves only a few forms every year. Therefore, you need to devise a backup plan in your mind. In the year 2004, only 16 per cent of the total applications were given approvals. Keeping this figure in mind, it becomes quite important to present proper information as well as documents, and have a secondary plan devised in case the application is turned down. In case the application of compromise is turned down, you can try to arrange for a medium of monthly installment in order to pay off the owed debt over the period time. IRS is quite reasonable as far as devising a proper payment plan is concerned. They just want to see that whether you are willing to work in coalition with them and want to pay off your debt.
Essential Tips For Effective IRS Compromise