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- Award-winning attorney Tony Adderley has over two decades of legal experience.
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If you owe the Internal Revenue Service (IRS) back taxes, it’s imperative that you resolve this issue as soon as possible to avoid penalties. But, some taxpayers simply cannot pay what they owe to the IRS. If you are unable to pay the full amount of your tax debt, it’s recommended that you consult with an attorney regarding an offer in compromise.
An offer in compromise program allows certain individuals who have past due tax debts to settle with the IRS and agree to pay an amount that is less than the total tax liability. This is one of the most effective ways to resolve tax liabilities, but you must meet certain requirements in order to take advantage of this program.
Los Angeles Lawyer Explains Who Qualifies For An IRS Offer in Compromise
No one wants to pay the full amount that they owe to the IRS, but only certain taxpayers will qualify for this program. At least one of the following requirements must be met in order for someone to qualify for an offer in compromise:
- Doubt to Liability: The taxpayer has a reason to believe that the amount he owes to the IRS was calculated incorrectly.
- Doubt to Collectability: The taxpayer is unable to pay the full amount.
- Effective Tax Administration: The taxpayer does not doubt the amount owed or his ability to pay it. But due to special circumstances, paying the full amount of debt would put an undue hardship on the taxpayer.
To determine if you meet one of these conditions, meet with Los Angeles tax attorney Tony Adderley about your case today.
Top Law Firms Discuss the Offer in Compromise Application Process
There is a formal process in place that you must follow if you are interested in making an offer in compromise to the IRS. First, you must submit Form 656 and pay an application fee to the IRS. On this form, you must explain to the IRS how much you would like to pay, when you would like to pay, and how you will get the money you need to pay the suggested offer. Applicants must also submit Form 433-A for individual tax debt or 433-B for business tax debt. This form will ask you detailed questions about your finances. You will be required to list all of your banking accounts, cars, properties, life insurance policies, personal assets, monthly income, expenses, available lines of credit, and investments so the IRS can get a clear picture of your financial health.
The IRS will carefully examine every piece of information on these forms, so it’s imperative that you work with an attorney to ensure that the information you are filing is accurate. In general, the IRS responds within a matter of weeks or months. If you do not hear back from the IRS within two years, your offer is automatically accepted.
Why Should You Hire Offer in Compromise Attorneys?
An experienced offer in compromise attorney can help you clearly make a case to the IRS when you submit the documents to improve your odds of being approved. With the help of an attorney, you can ensure that all of the information that you provide is accurate, so the IRS does not find a reason to reject your offer. An attorney can also assist you with calculating an appropriate offer to make. This is a crucial step in the process because your offer may be immediately rejected if the IRS considers it to be far too low.
The IRS may ask you to provide more and more documentation further along in the process. Gathering all of the documents that you need to submit can be time-consuming, but an attorney can help with this, too. If you end up submitting an offer before consulting with an attorney, it’s possible that your offer will be rejected.
Experienced Lawyers Can Help Appeal A Rejected Offer in Compromise
If your offer in compromise has been rejected, you will be notified via a letter sent in the mail. This notification will explain why your request has been rejected and provide information on how to appeal the decision. Some of the most common reasons why offers are rejected include:
- The IRS believes the offer you have made is not high enough based on your current income levels.
- You have accrued additional tax debts, which shows the IRS that you may not be compliant with the terms of the offer.
- You have not included enough information in the application.
- You have filed for personal bankruptcy and the case is ongoing.
- You have not filed your most recent tax return.
- You didn’t pay the application fees.
If you plan on appealing, it’s important to move quickly. Taxpayers only have 30 days from the date of the letter to appeal the IRS’s decision, so call an attorney at once.
Schedule A Consultation With Our Law Firm Today
If you have a past due tax debt, it’s in your best interests to seek legal representation from an attorney at law right away. Some of our many practice areas include offers in compromise, IRS tax penalties, tax appeals, payment plans, bank levy, tax liens, penalty abatement, innocent spouse relief, and other problems related to tax returns and audits.
Our offer in compromise attorneys can thoroughly review your case and determine if you qualify for an offer in compromise. Contact our office to schedule a consultation today by calling (310) 341-4410 or filling out the form on our website. We currently represent clients in San Bernardino County, Riverside County, Los Angeles County, and Orange County.