Michigan
Tax Attorneys

Offers in Compromise

An offer in compromise is a potential option for individuals who are unable to pay their tax debt in full. It allows them to propose a settlement amount that is less than the total amount owed.

The IRS evaluates various factors, including the person’s ability to pay, income, expenses, and asset equity, to determine whether to approve an offer in compromise. It is important to meet certain requirements, such as filing all required tax returns, making estimated payments, and not being involved in an open bankruptcy proceeding.

If the IRS cannot process an offer in compromise, they will return the application and offer application fees while applying any offer payments to the outstanding balance. Payment options may include lump sum cash payments or periodic payments.

Low-income individuals who meet certain certification guidelines may be exempt from application fees, initial payments, and monthly installments during the IRS review of the offer.

If an offer in compromise 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.

It’s worth noting that the specific details and procedures regarding offers in compromise can be complex and may vary depending on individual circumstances. Seeking the guidance of a qualified tax professional or attorney can be beneficial when navigating the process and ensuring the best possible outcome for your specific tax situation.

IRS Audit Defense

In Michigan, the Department of Treasury provides information and guidelines regarding tax audits. These audits are conducted to ensure compliance with tax laws, and the department outlines auditing standards, taxpayer rights, and the process for requesting reconsideration of Preliminary Audit Determinations (PADs) issued by the Treasury. It’s worth noting that while the Michigan Department of Treasury conducts tax audits, the Internal Revenue Service (IRS) is primarily responsible for federal tax audits.

IRS audits are often triggered when individuals fail to report all their income, claim excessive business deductions relative to their income, or have high annual earnings, among other factors. When someone receives an audit notice, it is common to also receive notices about penalties associated with the audit findings. In such situations, seeking legal assistance promptly is crucial.

IRS audits generally have a three-year look-back period, although exceptions may be made in cases involving significant errors. If you are facing an audit, it is advisable to consult with an experienced tax attorney who can provide guidance and representation throughout the process.

Anderson Bradshaw is a law firm that specializes in IRS tax debt relief and may be able to assist individuals in Michigan who are dealing with audits and related tax issues. It is recommended to reach out to them for personalized advice and support.

Innocent Spouses

If an affected couple files a joint tax return and is still married and living together in the same household, they may be eligible for innocent spouse relief. This relief option allows a person to avoid additional tax liability when their spouse understated taxes on their joint tax return, and the individual claiming innocent spouse relief was unaware of the mistake.

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

It is crucial to seek innocent spouse relief within two years of an IRS collection action. However, it is important to note that obtaining innocent spouse relief can be a complex process. Therefore, it is highly advisable to seek the assistance of an experienced tax attorney who can provide guidance and representation throughout the claim process.