California residents who have federal back taxes due may get tax relief through the IRS Offer in Compromise Program. In some circumstances, you can settle your income tax debt for pennies on the dollar.  Taxpayers will find more success if they use a California tax lawyer to help them rather than complete the process themselves.

For a taxpayer, an Offer in Compromise represents a great opportunity to resolve tax debt and move forward. For the IRS, accepting an Offer in Compromise represents the same opportunity, but it comes with the expectation that residents will begin to pay their taxes on time.

Hiring a California offer in compromise attorney can help you improve the chance that your offer will get accepted. At a minimum they can review your situation and provide you valuable information that will allow you to make an informed decision.  California tax lawyers can complete these tasks for you.

California tax lawyers will review your situation and submit the Offer in Compromise on your behalf.  Upon submission of the offer in compromise, the IRS must verify that the offer can be processed. The offer goes through a screening process to determine if the taxpayer or taxable entity has: (1) paid the required application fee; (2) ensured that all delinquent income tax returns have been filed; (3) not instigated a bankruptcy court proceeding; and (4) not been issued an audit notification.

Many California offers in compromise are denied. The two main reasons that rejection occurs is because the documentation is inaccurate or incomplete or the taxpayer earns in excess of the required allowance. Your offer in compromise attorney will make sure that your filing is accurate and complete.

A California tax lawyer will help you get your Offer in Compromise completed accurately and will give you the greatest chance that your offer will be accepted the first time it is submitted.

Need a California Tax Attorney?

The IRS has many programs in place to help residents with back tax problems. The options largely consist of an Installment Agreement, Offer in Compromise (”OIC”), and Currently Not Collectible status.  Your California tax attorney will understand these programs in detail so you don’t have to.

If you proceed with an Offer in compromise, you will be required to disclose sensitive financial information. Rejection rates for OICs are high, but your chances for success will increase if you work with a California tax attorney. Should your OIC be rejected, there is an appeals process.  A Currently Not Collectible option will still require full disclosure of the taxpayer’s financial situation.

Residents must file Form 656 if there is uncertainty that the tax liability could be collected in full via a lump sum payment or an installment agreement. Taxpayers should file Form 656-L when they believe that the tax liability claimed by the IRS is incorrect. You are not allowed to file offers simultaneously and claim both that the tax liability is incorrect along with an inability to pay the tax liability due.

If you want any hope of success you must make sure that you stay current with all your tax filings and payment requirements, including estimated taxes and federal tax deposits. Becoming delinquent or filing late could put an end to any chance of success you may have had.

Who is the Best Tax Attorney in California?

This issue is not as easy as you would think.  Even Income tax attorneys specialize in specific areas of the income tax code, including sales tax, business taxation, tax planning and strategy, etc.  The best California Tax attorney is the one that can help you get your income tax issue resolved and help you with ongoing income tax compliance. 

Assuming that paying your income tax bill in full is not an option, there are many options available if you need IRS tax relief. You may actually find that you don’t need to do anything to resolve your back income tax situation. This is because the IRS has only ten years to collect back income taxes starting with the date on which the income taxes were assessed. As a result, if you know that you have unpaid taxes that are older than ten years, the IRS may not be able to collect those taxes anymore.

Offer in Compromise applications are frequently denied and the Internal Revenue Service has the legal right to refuse your appeal. The Internal Revenue Service cannot be sued for not accepting the Offer in Compromise from California residents.

People should realize that if they have income tax problems there are many options afforded to them by the IRS. Procedures have been placed in service by the IRS to address most tax problems. Just make sure that you are working with a California Tax attorney and understand the options available to you.