Chicago Tax Attorney
As a Chicago tax attorney and CPA, I prepare tax returns and offer tax relief help to my clients. First, I will investigate your tax matters and evaluate your alternatives. Second, I file any unfiled tax returns. Third, I guide clients through the tax resolution process and prepare the necessary forms.
Tax relief help usually takes the form of an installment agreement or an offer in compromise (OIC).
IRS Installment Agreement
An IRS tax relief agreement or installment agreement permits the taxpayer to pay his full federal tax debt in installments. Tax relief agreements generally require equal monthly payments. The amount and number of installment payments depend on the amount of federal tax debts. The IRS also considers your ability to pay. However, an installment agreement is more costly than immediately paying all your unpaid federal income tax debts. The IRS charges interest and penalties on the unpaid portion of the federal tax debt.
If you owe the IRS more than $50,000, the IRS may also ask for financial information to determine your ability to pay. Even if you set up an installment agreement, the IRS may still file a Notice of Federal Tax Lien to secure the government’s interest until you make your final payment. However, the IRS can’t take any collection actions affecting your property while the IRS considers a taxpayer’s request for an installment agreement, while the installment agreement is in effect, for 30 days after the IRS rejects your request for an installment agreement, or for any period while the taxpayer appeals the rejection.
Installment Agreement Fees
In addition, the IRS charges a setup fee for installment agreements. The IRS raised its fees for installment agreements and offers in compromise. Effective January 1, 2014, the Internal Revenue Service increased the processing fees for standard installment agreements from $105 to $120 and doubt as to collectability offers in compromise from $150 to $186. The fees for a direct debit installment agreement remains unchanged at $52.
Offer in Compromise
An offer in compromise allows a taxpayer to settle tax debt for less than the full amount owed. The three types of offers in compromise include: (1) doubt as to collectibility, (2) doubt as to liability, and (3) an exceptional circumstance.
When evaluating doubt as to collectability, the IRS considers Ability to Pay, Income, Expenses, and Asset equity.
Generally, the IRS approves an OIC when the amount offered represents the most the IRS can expect to collect within a reasonable time.
IRS Raises OIC Fees
Effective January 1, 2014, the IRS increased the fee for doubt as to collectability offers in compromise from $150 to $186. However, the IRS recently proposed increasing the cost of the user fee for filing an Offer in Compromise to $300, starting February 27, 2017.
Unfiled Tax Returns
Starting March, 2017, the IRS will not consider OIC applications if the taxpayer has unfiled tax returns. However, I will prepare all your unfiled personal income tax returns and business income tax returns.
Tax resolution via an offer in compromise and the related tax issues are complex. Therefore, retain a Chicago tax attorney and CPA to represent you.