Many of people find it very difficult to resolve the tax debts. There are several methods to deal with this problem. One of the most efficient methods is offer in compromise. The people who are facing financial difficulties can go for this method or option. This is one of the best options for resolving and settling the tax debts of a taxpayer. It is an offer through which the debts are paid for a lesser amount than what he or she owes. It is generally an agreement between you and the tax department. This agreement is under the discretion of the tax department or government. This is because of the fact that only less than half of the requests submitted by the taxpayers are accepted by the tax department. If your request is rejected by the tax department, you can also go for appeals.
The main condition which has to be fulfilled by one is that he or she would have to show taxation authorities that they are facing major financial crisis. One should even know that it would take a lot of time for applying for such offer. He has to pay special fee when applying for this offer. He has to fill some few forms and such forms should be submitted with required fees. In case, he is below poverty line, and then he doesn’t required to pay several fees. The main requirement is information statement regarding financial and personal details of him and his spouse. One might even need several financial documents to support their request for ‘offer in compromise’.
You have to be very careful, when you make disclosures in front of the tax department. The disclosures you make may badly affect you in the future. The negotiation process is very lengthy that tax interest amount will keep on increasing during this time. If your request for this offer is not accepted, then you will have to pay more amount than the actual tax amount. There is a greater chance for the negotiation to fail.
Several conditions have to be fulfilled for getting qualified in the criteria of taxation department. If one request is approved by the tax department then taxpayer could be availed all benefits, if not then he or she has to pay full amount of tax. For this also, there’re several alternatives regarding tax amount payment. One could utilise instalment agreement also because this would assist one to pay their amount in minor installments. This is actually the agreement between taxpayer and taxation department which permits the taxpayer for paying tax debt in easy installment form. It’s mostly utilised for unfiled tax returns.
You can go to a tax law firm therefore you can get the services of a good tax lawyer. You can hire a tax attorney in this process. The negotiation process can be done with effectiveness if you have the access to a reputed tax attorney.