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Offer-in-Compromise
IRS Compromise: What is an Offer in
Compromise?
An IRS compromise
("offer in compromise") is an offer of financial compromise made to the
Internal Revenue Service
(IRS), under special circumstances, by those who are unable to pay
their tax debts. It enables taxpayers to benefit in
cases where they are doubtful about accuracy of the assessed tax amount
and believe that they are not liable to pay the
amount of tax expected of them. An IRS compromise /offer in compromise
is also made if there is a doubt on a taxpayer's
capability to ever pay the complete amount of tax owed.
If
both conditions mentioned above are not met, and the assessed tax is
correct and there is no doubt about a
taxpayer's ability to pay the tax in full, but an exceptional
circumstance exists then it allows the IRS to reconsider the
taxpayers IRS comromise "offer in compromise."
To fully qualify
for "offer in compromise," a taxpayer must prove to the IRS that if the
pending taxes are
collected, then it will cause extreme economic hardship to the
taxpayer. "Economic hardship" for this purpose is if the
taxpayer is incapable of earning a living because of an illness,
disability, or medical condition and it is obvious that
the economic resources of the person in question will be depleted
because of medical care and support or if the taxpayer
has assets which when liquidated will render the taxpayer unable to
meet basic living expenses. It will also consider
circumstances where the taxpayer is not capable of borrowing against
the equity in his assets and disposition by seizure or
sale of the assets would have sufficient adverse repercussions.
If all the
conditions mentioned above are fulfilled and the IRS compromise is to
be put into action, then a form
called form 656 should be filled.
Among other
conditions, the taxpayer must agree that he/she will file and pay all
pending taxes for a period of 5
years after the offer. It is advisable to read the renewed regulations
under Section 301.7122-1 T. of the IRS to gain more
details about "offer in compromise."
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Offer In Compromise provides detailed
information on Offer In Compromise, Irs Offer In Compromise, Offer In
Compromise Help, Offer In Compromise Software and more. Offer In
Compromise is affiliated with
Sarbanes Oxley
Compliance.
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offer in
compromise -- irs compromise
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