Getting Tax Debt Help in California
There are five ways you can get out of tax debt. One of these ways is making an Offer in Compromise.
Unfortunately, circumstances do not always work together to your advantage. As a result, there may be
times when you will find yourself in a tough situation with difficult consequences.
Don’t be Late
One of these difficult situations that
you may find yourself in if you do not
plan ahead properly is falling behind
on your taxes. The IRS is not very
lenient with those who refuse to pay
Fortunately, there are many tax
attorneys that are willing to help you
get out of this situation. There are
many places you can get tax debt help
If you do not get help in reaching a
tax debt settlement, you may face
some serious consequences such as wage garnishment among other things. When you go in to talk
about possible debt relief paths you could take with a tax attorney, the tax attorney will take a look at
your current financial situation.
Use a Structured Plan
Then, he or she will help you come up with a payment plan that will allow you to pay of your debt. If
there is no possible payment plan that would work with your current financial situation, then your tax
attorney may encourage you to consider an Offer in Compromise.
An Offer in Compromise is when you offer to pay less than the amount you owe. Your attorney will help
you go through the proper paperwork so that you can reach an agreement with the IRS.
The IRS may or may not grant your request based on your current financial situation and other factors.
They are more likely to accept an Offer in Compromise when they are not sure they would ever be able
to receive the full amount from you.
They are also more likely to accept an Offer in Compromise when they are not sure that you are the one
responsible for the debt. If this option does not work out for you, then you may want to try the four
other ways of getting out of tax debt.
A Los Angeles tax attorney or really any tax attorney can discuss these four other ways with you if they
are appropriate for your current financial situation. In order to formally apply for an Offer in
Compromise, your attorney will have you fill out Form 656 and Form 433-A. Form 656 is the official
Offer in Compromise form and Form 433-A is a Collection Information Statement.
The offer you make of how much you are willing or can pay will be calculated and stated on the
Collection Information Statement. Of course, in filing these forms you will be making a commitment to
You will be agreeing to pay the amount stated on the
Collection Information Statement. In addition, you
are also committing to pay future taxes on-time and
in full for at least the next five years.
As the IRS will be taking a loss, the IRS is allowed to
keep any tax refunds, payments, and credits that
were part of your taxes before you arranged to have
an Offer in Compromise. They will also keep all tax
refunds, payments, and credits that would apply the
year you arrange to have the Offer in Compromise.
If you default on your commitment, then the Offer in
Compromise can be cancelled and you will be
required to pay your full tax debt once more. As a
result, you will want to make sure that you pay your
taxes on time and in full for the next five years.
Worst Case Scenario
If April 15th arrives and for some reason you cannot file your tax forms before then, you will need to
apply for an automatic extension. This will give you some more time to get your taxes in before they
revoke your Offer in Compromise.
However, this will be your last chance to put off paying your taxes. You can make estimated payments or
extension payments in order to make sure that you make the April 15th due date on time.
If you fail to do these things, not only will you have to pay the full debt, but the IRS will add on interest
and other penalty fees. They will also begin pestering you to pay it off.
You will want to avoid this at all costs. It is best not to make an Offer in Compromise if you do not feel
like you could keep your commitment.
Through the Offer in Compromise, you will be paying less than they initially charged you. However, the
offer that you make has to be equal to or more than the reasonable collection potential.
The reasonable collection potential is a calculated amount that the IRS thinks they would be able to
collect from you from the money that you earn during the next two years.
Photo Credit: JD Hancock, Woodley Wonder Works