Florida
Tax Attorneys

Offers in Compromise

The Internal Revenue Service (IRS) provides an option called an offer in compromise, which allows individuals to settle their tax debts for less than the full amount owed. When considering an offer in compromise, the IRS evaluates factors such as a person’s ability to pay, income, expenses, and asset equity.

To be eligible for an offer in compromise, individuals must have filed all required tax returns and made all necessary estimated payments. They should also not be involved in an open bankruptcy proceeding and must have a valid extension for the current year’s tax return. Additionally, if the individual is an employer, they must have made tax deposits for the current and preceding two quarters before applying.

If the IRS is unable to process an offer in compromise application, they will return the application and offer application fee. Any offer payment included will be applied to the outstanding tax balance. Payment options for an accepted offer in compromise can include a lump sum cash payment of 20% of the total offer amount, followed by payment of the remaining balance in five or fewer installments. Alternatively, periodic payments can be made, allowing the individual to pay the balance in monthly installments.

For individuals who meet low-income certification guidelines, they do not need to submit the application fee, initial payment, or make monthly installments while the IRS reviews the offer. In the event that an offer is rejected, individuals have the right to appeal within 30 days using the Request for Appeal of Offer in Compromise, Form 13711. The IRS Independent Office of Appeals can provide additional assistance in the appeals process.

IRS Audit Defense

The Florida Department of Revenue is responsible for auditing businesses in Florida to ensure compliance with state tax laws, while the Internal Revenue Service (IRS) is the federal agency that conducts audits throughout the United States. Audits can be initiated for various reasons, such as underreported income, questionable deductions, or errors in calculations.

Receiving a notice about an audit is a significant event, and it is often followed by a notice about potential penalties. It is crucial to seek legal representation as soon as you receive an audit notice to navigate the audit process effectively.

IRS audits generally cover a period of three years, although exceptions can be made in cases involving major errors. Going through a tax audit can be a stressful experience for individuals and businesses alike. It is important to work with a qualified attorney who specializes in IRS tax matters to ensure proper representation and to explore options for IRS tax debt relief. They can guide you through the audit process and help protect your rights and interests.

Innocent Spouses

Innocent spouse relief is a provision that can be available when a joint tax return is filed, and one spouse is unaware of the errors or underreporting of taxes made by the other spouse. It relieves the innocent spouse from being held liable for the additional taxes owed.

When taxes are underreported, the responsibility lies with the spouse who made the errors, and the IRS should reflect this in the audit report. To qualify for innocent spouse relief, the filing spouse needs to establish that they had no actual or constructive knowledge of the understatement and that it would be unfair to hold them liable for the tax debt.

It’s important to note that innocent spouse relief must be sought within two years of any IRS collection action. However, obtaining innocent spouse relief can be a complex process, so seeking legal assistance is advisable to navigate the requirements and increase the chances of a successful claim. An experienced attorney can provide guidance and help present your case effectively to the IRS.