Most Americans want to be able to get their taxes done and not worry about them for another year. They are worried that they will put something in wrong, and someone from the IRS will show up and make life miserable for them. While you may have heard the horror stories that come with ] tax agents, there are still ways for you to get a bit of Los Angeles tax debt relief.
The Offer in Compromise is a compromise released in 2011 and is meant to help you as the taxpayer settle your debt for a lower amount than what is owed. This initiative can be helpful if you are not able to make the tax payment of if this payment would place a big financial hardship on you.
The IRS will make a few considerations determine if you are eligible for this kind of compromise. These include:
· How well you will be able to pay your taxes.
· How much you earn.
· Some your expenses.
· And the equity of your assets.
You will be able to check to see if you qualify for this initiative using the IRS Pr-Qualifier Tool. You will need to be up to date concerning all of the payment and filing requirements. You also cannot be in bankruptcy proceedings.
To become eligible for this initiative, you must complete the right forms for the IRS to consider you. Some of the steps to take to become qualified include:
· Filing either a Form 433-A or Form 433-B, depending on if you are an individual or business.
· Fill out the Form 656
· Pay the application fee. This fee is going to be $186
· Pay the first payment listed on Form 656.
Once you submit the forms to the IRS, you will need to select the payment method that works for your situation. There are two payment plans that the IRS accepts. The first one is the lump sum cash payment. For this payment, you will make the first payment, totaling 20 percent of what you owe. You will then wait to hear confirmation from the IRS about receiving this initiative. You must then pay the rest of your balance within five payments.
The other option is to pay the first payment when you submit the application. You will then keep paying the remainder of your balance each month while the IRS considers the offer. If the IRS accepts the proposal, you will pay these monthly payments.
· The IRS can still place a tax lien on your property
· The IRS will place any fees and payments to the tax liability
· Collection activity may cease.
· Legal collection and assessment periods can be extended
· You must make the payments you stated in your offer, or the IRS could refuse you.
· If the IRS does not make a decision regarding this initiative within two years, you will automatically get this initiative.
Picking the right Los Angeles tax debt resolution company is important if you need help with filing your paperwork or applying for other exceptions to your tax debt. There are many companies who are out there that will work just to take advantage of you and rob you of your hard-earned money. These companies may promise lower payments on the taxes, give you a short time frame to get the debt request, and ask you to leave out information on the IRS forms. You should also watch out for any company that asks for upfront fees or uses sales tactics to convince you to purchase their product.
