Installment Agreements and Offer in Compromise

If you are facing collection action from the IRS for unpaid taxes,  you are not alone. This can be intimidating, as the IRS will go to great lengths to get the money it is owed.  You may have options for repaying the IRS and still continuing to live your life. At Weisberg Kainen Mark, PL, our lawyers have experience handling all types of IRS tax collections issues. We labor to protect your rights throughout the course of negotiating with the IRS. It may be possible to have tax relief through a variety of collection alternatives, such as arranging an installment agreement or an offer in compromise.

Installment Agreements

An installment agreement permits a taxpayer to satisfy tax payment obligations (including interest and penalties) over time. Required monthly payments are agreed to by both you and the IRS. With an installment agreement, the IRS must cease all forced collection activities against you, including levies that may have been placed on bank accounts, wage garnishments and property seizures. Collection activities may not resume unless the taxpayer fails to comply with the terms of the agreement, or fails to stay current on his or her ongoing tax obligations.

Though it seems advantageous to both the taxpayer and the IRS, negotiating the creation of an installment agreement can be extremely difficult. Our firm has experience with these agreements and can assist you through the process. We will advise you on the potential payments you may be facing and how compliance with all IRS requirements is essential to the successful repayment of your tax debt.

Offers in Compromise – Doubt as to Collectibility

It is possible to reach an agreement with the IRS called an Offer in Compromise (OIC). This is an arrangement that is made in order to settle a tax debt that is for less than the full amount owed. The IRS will often agree to this when it appears unlikely that it will be able to collect the full amount from the debtor. The amount accepted in the compromise typically is the greatest amount that the IRS determines that it can collect within the statute of limitations on collection.

Working with the IRS to get an OIC accepted can be beneficial for both the IRS and the taxpayer. The IRS believes that its acceptance of the offer can give the taxpayer a fresh start and help with future filings and tax payments. The debtor also benefits because the offer is for a lower amount than actually owed, and it can often be paid either over time or in a lump sum.

Drafting, submitting and obtaining approval for an Offer in Compromise is a complex process. An experienced tax attorney at our firm can aid in the process. We can also help clients with future tax compliance planning, as the IRS expects the taxpayer with whom the OIC was arranged to be in full tax compliance for the next five years.