Tennessee
Tax Attorneys

Offers in Compromise

The offer in compromise (OIC) program is offered by the IRS. An offer in compromise allows individuals to settle their tax debts for less than the full amount they owe.

The IRS evaluates several factors, including a person’s ability to pay, income, expenses, and asset equity, to determine whether to approve an offer in compromise. To be eligible for an offer in compromise, individuals must have filed all required tax returns, made all required estimated tax payments, not be involved in an open bankruptcy proceeding, have a valid extension for the current year’s tax return, and have made tax deposits as an employer for the current and past two quarters.

If the IRS cannot process an offer in compromise application, they will return the application and any fees paid, applying any offer payments to the outstanding tax balance. Payment options for approved offers in compromise include a lump sum cash payment of 20% of the total offer amount, followed by the remaining balance paid in five or fewer payments, or periodic monthly installment payments.

Individuals who meet low-income certification guidelines are exempt from paying the application fee, initial payment, or monthly installments during the IRS’s review of the offer. If an offer in compromise is rejected, individuals have the option 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 appeals process.

It is important to note that the offer in compromise process can be complex, and having the guidance of a tax attorney at Anderson Bradshaw can greatly assist in navigating the requirements and increasing the chances of a successful outcome.

IRS Audit Defense

The Tennessee Department of Revenue conducts audits when there are concerns or questions about a person’s tax return. Similarly, the IRS also performs audits, which may arise from issues such as undocumented filing status, mathematical errors, or failure to report foreign accounts.

Typically, receiving a notice about an audit is accompanied by information about potential penalties. It is advisable to consult with a lawyer at Anderson Bradshaw promptly upon being notified of an audit to ensure proper guidance and representation throughout the process.

IRS audits generally have a three-year statute of limitations, meaning they can go back up to three years from the date the tax return was filed. However, exceptions can be made in cases involving significant errors.

Anderson Bradshaw is a firm that provides assistance to clients in Tennessee facing various types of audits. When dealing with tax audits, it is crucial to seek the guidance of an experienced tax attorney who can help navigate the process effectively and protect your rights and interests.

Innocent Spouses

Innocent spouse relief is available to couples who file joint tax returns and are still married and living together in the same household. It provides a way for individuals to avoid paying additional taxes when their spouse understated the taxes due on their joint tax return, and the innocent spouse was unaware of the mistake.

Underreporting taxes is the responsibility of only one spouse, and the audit report should reflect the attribution of the underreported tax to that spouse. The filing spouse seeking innocent spouse relief must 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 is important to note that people must request innocent spouse relief within two years of an IRS collection action. Therefore, timely action is crucial.

Given the complexity of innocent spouse relief cases, it is highly recommended to have legal representation to navigate the process and ensure the best possible outcome. Consulting with a tax attorney at Anderson Bradshaw who is experienced in innocent spouse relief cases can provide the necessary guidance and assistance in pursuing a successful claim.