Pensacola Offer in Compromise Attorney

Pensacola Offer in Compromise Lawyer

Taxpayers can end up owing debt to the Internal Revenue Service (IRS) because of missing payments, penalties, and interest. All of this can stack up over time, especially when they are not addressed. For some taxpayers, the debt becomes impossible to address, and the collection actions the IRS takes only worsen their financial problems. A Pensacola offer in compromise attorney could help taxpayers navigate their options to resolve their debt for less.

TaxSmith, LLC: Your Pensacola Offer in Compromise Lawyer

The IRS is willing to work with taxpayers who can’t repay their debt, and an offer in compromise (OIC) is one of the most useful methods for taxpayers to clear their liability. You are more likely to successfully secure an OIC when you work with an experienced and diligent lawyer from TaxSmith, LLC. Our firm has years of tax law experience, so we can bring you straightforward and clear tax advice, based on our knowledge of offer in compromise laws.

TaxSmith, LLC, can examine your debt settlement options, including OICs. We can represent you to the IRS, such as in discussions at the IRS Taxpayer Assistance Center (TAC) Offices located in Pensacola at 180 9th Avenue. These TAC offices received over 2 million contacts in Fiscal Year (FY) 2024.

What Is an Offer in Compromise in Pensacola?

An OIC is a method of debt settlement available to a small number of taxpayers. If you owe the IRS a debt and cannot pay it back, you could secure an OIC and settle your entire debt for a lesser amount. OICs can be paid in:

1. A lump sum, paid in five or fewer payments
2. A periodic payment, paid monthly until the accepted offer is fully paid

OICs are very helpful but difficult to secure. In FY 2024, the IRS received 33,591 OICs from taxpayers, and accepted 7,199 of them. This is an acceptance rate of about 21%.

Other Debt Settlement Options Before an Offer in Compromise

One reason OICs are hard to get is that the IRS requires that no other debt settlement options are possible for you to get an OIC. These include:

• Installment agreements or payment plans
• Currently Not Collectible status, which is a temporary pause on collection
• Penalty abatement, which removes specific penalties and interest from your debt
• Innocent spouse relief when your debt is incurred by a spouse

When you owe the IRS a debt, you are usually expected to pay the amount back in full. Only if this would be financially impossible for you or put you into financial hardship will the IRS be willing to negotiate other ways to settle your debt.

How Do You Get an Offer in Compromise?

You must meet numerous qualifications to apply for an offer in compromise. The IRS may accept an OIC if one of the following applies:

1. A genuine doubt exists that you are liable for the tax debt, such as issues with identity theft, or you believe that you paid the debt.
2. A genuine doubt exists that the IRS can collect the full debt, as collecting it would put you in financial hardship.
3. The IRS accepting the OIC would be effective tax administration, as it is unlikely you can repay the full debt.

However, you must also meet other qualifications to apply. These include:

• You have filed all taxes required of you, like tax returns and estimated payments.
• You aren’t currently in a bankruptcy proceeding.
• You paid the application fee and included all required documentation.
• You paid the required first payment or payment portion.
• For an OIC for the current tax year, you have a valid extension on filing.
• For employers, you filed the deposits required of you in the present quarter and the two prior quarters.

When you have the support of a dedicated attorney, they can assess these qualifications to see if you can apply for an OIC. They can also help you make informed decisions about debt settlement options in general.

FAQs

Q: How Much Does an Offer in Compromise Cost?

A: The cost of an offer in compromise includes a filing fee, the beginning portion of the offer you are paying, and any attorney’s fees. There is a filing fee of $205, which is non-refundable. The first part of your offer is either 20% of a lump-sum payment or your first monthly payment, depending on the type of OIC you are requesting. Attorney’s fees are based on factors like the complexity of your case and the attorney’s experience.

Q: What Percentage Will the IRS Accept for an Offer in Compromise?

A: The percentage of your existing debt that the IRS will accept for an offer in compromise depends on your financial circumstances. The IRS will generally accept an OIC that it deems to be:

1. What you can reasonably pay
2. What the agency can expect to collect from you, based on your income, expenses, and other financial information

This amount varies significantly from person to person.

Q: What Is the Downside to an IRS Offer in Compromise?

A: The primary downside to an IRS offer in compromise is that they are difficult to get. Only a small number of people with tax debt qualify for an OIC, and few of those who qualify are accepted. Only 21% of OICs made in FY 2024 were accepted, or about one in five.

The other downside to an OIC is that if your offer is accepted, you need to fulfill your side of the agreement, which can still be financially difficult.

Q: Can I File an Offer in Compromise Myself?

A: Yes, it’s possible to file an offer in compromise yourself, but it isn’t always a good idea. You are much less likely to have a successful OIC without legal help. When you hire an offer in compromise attorney, they can determine if you qualify and create a strong offer to present to the IRS. They can also determine what the ideal offer is; that way, your offer is more likely to be accepted, but it also doesn’t cause you financial hardship.

Hire an Offer in Compromise Attorney in Pensacola

An OIC is an incredibly useful tool that can give you a fresh start, let you start paying your taxes, and get you back in good standing with the IRS. Reach out to TaxSmith, LLC, today to see how we can help your offer in compromise case.