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Let Leon Young & Associates tax resolution specialists help you to get that stress out of you life and into our hands.  This back taxes is probably due because you did not pay your taxes in full when you filed your income tax return.  If you do not pay in full when you file your tax return, you will receive a bill.  This bill begins the IRS collection process, which continues through alternative payment options and ends when your account is satisfied.  

INSTALLMENT AGREEMENT - IRS encourages taxpayers to pay what they owe as quickly as possible.  For those individuals or businesses not able to resolve a tax debt immediately,, an installment agreement can be a reasonable payment option.  Installment agreements allow for the full payment of the tax debt in smaller, more manageable amounts.  To be eligible for an installment agreement, all returns that are due must be filed.  For More on Installment Agreement Click Here. 

• Meeting the Terms of an Installment Agreement:  Besides making installment payments on time, the terms of an installment agreement require that all tax returns required to be filed and payments  (including an Estimated Tax payments of Federal Tax Deposits) due during the life of the agreement be made.  For More on the Requirements of an Installment Agreement Click Here.

·             For More Information on Filing Requirements Information Click Here.

OFFER IN COMPROMISE - If taxpayers are unable to pay a tax debt in full, and an installment agreement is not a option, then they may be able to take advantage of the offer in compromise (OIC) program.

WHAT IS AN OFFER IN COMPROMISE - An Offer in Compromise is an agreement between taxpayer and the IRS that resolves the taxpayers tax bill for a lower amount.  If you qualify for an Offer in Compromise, your tax problem can be settled for less than the initial liability.  It is a business decision whereby the IRS agrees to accept less in lieu of pursuing the taxpayers, and collecting the entire tax bill prior to the statute of limitation expiring. The IRS has the authority to settle or compromise federal tax liabilities by accepting less than full amount under certain circumstances.  One of the following factors must be established in order for the IRS to accept an Offer in Compromise and settle the liability:

·             The taxpayer cannot pay off the liability;

·             There is doubt that the taxpayer actually owes the liability;

·             The settlement would promote effective tax administration

The offer in Compromise program requires that subsequent to acceptance of an Offer in Compromise; the taxpayer must remain current on all tax obligations for a period of five (5) years.  For More on Offer in Compromise click here.

IS AN OFFER IN COMPROMISE RIGHT FOR YOU? Should the IRS determine that a taxpayer is unable to pay the liability in a lump sum or through an installment agreement, and has exhausted the search for other payment arrangements, the last option would be to file an offer in compromise.  The objective of the OIC program is to accept a compromise when it is in the best interests of booth the taxpayer and the government and promotes voluntary compliance with all future payment and filing requirements. To be considered for an OIC you must start by completing the most current IRS Form 656.  As of November 1, 2003, there is a $150 application fee for filing an Offer in Compromise (OIC), which you must attach to Form 656.  You might be exempt from paying the fee if there is some doubt as to whether you owe the tax bill or if your monthly income falls at or below income levels based on the Department of Health and Human Services (DHSS) poverty guidelines.  If you claim the poverty guidelines exemption, you must complete and attach Form 656- to certify your eligibility for exemption.

For More on Is an Offer in Compromise Right for You Click Here.  

IS YOUR OFFER IN COMPROMISE  (OIC) PROCESS ABLE?  In order to determine whether or not you are eligible to have your offer in compromise processed, consider the following questions below, (The questions below do not apply if your offer is based only on doubt as to liability.):

                                                                                                     YES   NO

1.  Do you currently have an open bankruptcy? You should contact your      __     __

     Attorney if you are not certain.  If you are involved in an open

     bankruptcy proceeding, contact your local IRS insolvency office.

     Any resolution of your outstanding tax liabilities generally must

     take place within the context of your bankruptcy proceeding.

2.  Do you have any unfilled federal tax returns that you are required          ­­___ __              

     to file ? You must file all tax returns that you were legally required

     to file prior to submitting an offer in compromise.  This includes but

     not limited to:

·         All Income Tax, Employment Tax, and Excise Tax returns, along

will all required Partnership, Limited liability Corporations, or

closely held Sub-Chapter S Corporation returns.

     If you did not file a return for a specific year prior to submitting your

     OIC because you were not legally required to file the return, then you

      must include a detailed explanation of your circumstances with your

     OIC application.

3.      If you are a business with employees, have you failed to timely          ___  ___        

make any required federal tax deposits for the current quarter and

the two immediate preceding quarters?  (If you have any untimely

federal tax deposits for the above quarters or late filing of returns,

then you must answer yes to this question.)

If you answered YES to any of the questions above, you are not eligible to have an offer in compromise considered or processed at this time.  If you answered NO to all of the questions above, they you may be eligible to have an offer considered and processed.  For a Free Tax Consultation click here.

OFFER IN COMPROMISE - WHO IS NOT ELIGIBLE? A taxpayer are not eligible for consideration of an Offer in Compromise based on doubt as to collectibles or effective tax administration if:

·             Taxpayer has not filed all federal tax returns, or

·             Taxpayer is involved in an open bankruptcy case.

Furthermore, if an ongoing business taxpayer files an Offer in Compromise for payroll taxes, that business must have filed and deposited all payroll taxes on time for two quarters preceding the Offer in Compromise.  The taxpayer must further deposit all payroll taxes on time during the quarter in which the Offer in Compromise was submitted.

The Offer in Compromise program requires that subsequent to acceptance of an Offer in Compromise, the taxpayer must remain current on all tax obligations for a period of five (five) .  Therefore, if the taxpayer's Offer in Compromise is accepted and paid in full, but he later fails to pay current income taxes or other taxes, the Offer in Compromise might be revoked by the IRS. More on Filing an Offer in Compromise click here.  Click her to view Contractual Terms in an Offer in Compromise.