Indiana
Tax Attorneys

Offers in Compromise

An offer in compromise allows individuals to settle their tax debt for an amount less than the full amount owed. The IRS considers various factors, such as the person’s ability to pay, income, expenses, and asset equity, when evaluating an offer in compromise.

The primary criterion for approval is that the offered amount represents the maximum amount the IRS can reasonably expect to collect within a reasonable timeframe. To be eligible for an offer in compromise, individuals must meet certain requirements, including filing all required tax returns, making estimated tax payments, not being involved in an open bankruptcy proceeding, having a valid extension for the current year’s tax return, and making required tax deposits if they are employers.

If the IRS is unable to process an offer in compromise, they will return the application and any application fees, and apply any payments included to the outstanding tax balance. Payment options for accepted offers in compromise may include a lump sum cash payment of 20 percent of the total offer amount, followed by payment of the remaining balance in five or fewer installments, or periodic payments made in monthly installments.

Low-income taxpayers who meet specific certification guidelines do not have to submit the application fee or make initial payments or monthly installments while the IRS reviews their offer. In case an offer in compromise is rejected, individuals have the right to appeal the decision within 30 days using the Request for Appeal of Offer in Compromise, Form 13711.

The IRS Independent Office of Appeals provides additional assistance in the appeal process. It is important to note that the offer in compromise process can be complex, and seeking the guidance of a qualified tax attorney at Anderson Bradshaw can greatly help in navigating through the requirements and increasing the chances of a successful resolution.

IRS Audit Defense

The Indiana Department of Revenue provides an audit manual that outlines the procedures for desk audits and field audits in Indiana. These audits are conducted to ensure compliance with state tax laws.

The IRS is also involved in conducting various types of audits, and they can be triggered by factors such as excessive charitable deductions, home office deductions, or business expenses. When a person receives a notice of an audit, it is common for a notice about potential penalties to follow shortly afterward.

In such situations, seeking the assistance of a lawyer at Anderson Bradshaw who specializes in tax matters is highly advisable. An experienced tax attorney can guide individuals through the audit process, protect their rights, and provide valuable advice on how to handle the audit effectively.

It is important to note that IRS audits generally have a statute of limitations of three years, during which the agency can review and adjust previously filed tax returns. However, exceptions can be made in cases involving significant errors or fraudulent activities.

Anderson Bradshaw is a firm that has expertise in tax audits and can provide assistance to individuals facing such situations. Every audit is unique, and the guidance of a qualified tax attorney can be instrumental in achieving the best possible outcome during an audit.

Innocent Spouses

Innocent spouse relief is a provision that can benefit couples who file joint tax returns and find themselves in a situation where one spouse has understated taxes without the knowledge of the other spouse. This relief allows the innocent spouse to avoid being held liable for the tax debt caused by the understatement.

Underreporting of taxes is attributed to only one spouse, and this attribution should be reflected in the audit report. The filing spouse seeking innocent spouse relief must establish that they had no actual or constructive knowledge of the tax understatement and that it would be unfair to hold them responsible for the resulting tax debt.

To pursue innocent spouse relief, it is important to act within the specified timeframe. Generally, individuals must seek innocent spouse relief within two years of an IRS collection action.

Consulting with an experienced tax attorney at Anderson Bradshaw is highly recommended to navigate the process and ensure that all necessary requirements are met. The IRS has specific criteria and documentation requirements for innocent spouse relief, and an attorney can provide guidance and support to increase the likelihood of a successful claim.