Pensacola Offer in Compromise Attorney

Pensacola Offer in Compromise Lawyer

When you owe significant unpaid taxes to the Internal Revenue Service (IRS) that you cannot repay, it can be incredibly overwhelming. Many emergency circumstances can cause taxpayers to end up behind, resulting in penalties and interest that make the liability unpayable. Working with a Pensacola offer in compromise attorney could help you apply for an offer in compromise, potentially clearing your debt for a lesser sum.

Offer in compromise cases can be difficult to navigate. However, a successful offer in compromise (OIC) can be very financially beneficial. At TaxSmith, LLC, we can help you determine if you qualify for an OIC and look at other potential options to resolve your tax debt. We understand the stress of this situation and want to provide the crucial support you need.

Our firm has decades of tax law experience that we use to your advantage. You can get additional support from your local Taxpayer Assistance Center located at 7180 9th Avenue North in Pensacola. Our firm can also represent you in meetings or negotiations here or at other office locations.

The Basics of an Offer in Compromise in Pensacola

An OIC with the IRS is an option for taxpayers with significant tax debt that they cannot repay. You can pay off your tax debt for a lesser amount than you owe. There are many qualifications and requirements to file an OIC, and there is no guarantee your offer will be accepted.

In fiscal year 2024, the IRS accepted 7,199 OICs out of 33,591 proposed, or an acceptance rate of about 21.4%. In comparison, in FY 2023, the IRS received 30,163 proposed OICs and accepted 12,711, making an acceptance rate of 42.1%. The IRS only accepts OICs when paying your entire tax liability is impossible or would prevent you from paying for your basic living expenses. You must also have tried other methods of resolving your tax debt first.

For taxpayers who can get an OIC, this is an incredibly useful tool to get a fresh start. If you qualify to apply, the IRS will suspend collection actions during the deliberation process, which can help alleviate some stress.

When Can You Apply for an Offer in Compromise?

Your application for an OIC may be considered if you can prove you meet one of the following criteria:

1. Doubt of liability: If the IRS has a legitimate doubt about whether you are truly liable for the stated tax debt or any tax debt at all, this is grounds to file an OIC. This may be based on you having already paid the debt or an issue with identity theft.
2. Doubt of collectability: This applies if there is genuine doubt that you can pay the full tax debt given your financial situation, if your financial situation means it would be unfair to collect the tax debt, or if doing so would cause you financial hardship.
3. Efficient tax administration: The IRS may accept your offer if you show evidence that it would be beneficial to agency administration, meaning that the IRS would collect at least some of what it is owed when it would not be able to recover the full tax debt.

Your application carries the burden of proof to show the IRS that one of these things is true.

Offer in Compromise Qualifications

There are additional requirements to apply for an OIC in Pensacola. This includes proving that you:

• Are not currently in bankruptcy proceedings
• Filed all your required tax returns and estimated payments
• Have a valid extension for this year’s tax return if that is the year you are filing for
• Filed the necessary information, paid the filing fee, and paid the initial OIC amount
• Made tax deposit payments for the current quarter and the past two quarters if you are an employer

The initial OIC amount is a portion of the settlement you are proposing, indicating that you can afford to pay. The amount of this payment will depend on whether you are filing for a lump sum or an installment agreement OIC. If the IRS accepts your offer, this becomes your new tax liability, and your initial amount is the beginning of paying it off.

FAQs About Pensacola, FL, Offer in Compromise Law

How Much Should You Offer for an Offer in Compromise?

The amount you should offer for an offer in compromise will depend on your unique financial situation. The IRS reviews several factors when determining what is a fair amount for an OIC, including the tax you owe, your ability to pay, your income, and your expenses. If your offer is reasonable, considering this information, the IRS is likely to accept it. The IRS may also submit a counteroffer. Your attorney can help you offer a fair amount without overpaying.

How Much Does It Cost to Apply for an Offer in Compromise?

The application filing fee for an offer in compromise is $205, but when you file the application, you should also include the first portion of your OIC payment. This may either be 20% of the lump sum offer or the first monthly payment for an installment offer. It can cost you more to hire an offer in compromise attorney, but you could save a lot more by improving the chances of filing a successful OIC.

Who Can Help Me With an Offer in Compromise?

An experienced Pensacola offer in compromise lawyer can help you prepare and file an OIC. While an attorney cannot guarantee a successful application, they can provide you with important resources and support, thereby increasing your application’s chances of success. An attorney can also advise you on other options for reducing your tax debt if you don’t qualify for an OIC.

Is It Worth It to Do an Offer in Compromise?

A: It may be worth it to do an OIC, depending on your circumstances. An OIC can save you a significant amount of money if you qualify and provide a fresh start. First, ensure that you qualify for one of the reasons to file an OIC and that you meet the other requirements. Working with an attorney can provide you with a better understanding of your likelihood of success and potentially increase your chances of achieving a favorable outcome.

Hire an Offer in Compromise Attorney in Pensacola

There are several options for resolving your tax debt if you cannot pay the full amount. Contact TaxSmith, LLC today to determine your eligibility for an OIC and other tax settlement options.