If you face tax trouble, you may wonder: What does a Tax Relief & Resolution – Trust the Experts at Tax Rise mean? Here is some information to help you make up your mind. These options include Doubt of liability and collectibility, Tax penalty abatement, and Offer in compromise. To get started, submit an IRS Form 2848 and determine if you qualify for these options. Then, contact an enrolled agent for more information.
Offer in compromise
An offer in compromise is a legal deal between the IRS and a taxpayer in which the IRS settles a debt for less than the total amount owed. To see if you qualify for an offer in compromise, you must first file your taxes. If you have not filed your taxes yet, you should file them as soon as possible. You should include a copy of your tax return with your application. You should also pay any required estimated taxes. If you are behind on your tax filing, you should plan to catch up. You can also use tax software to get back on track.
In some cases, a client may submit an offer rejected by the IRS, even after submitting it. If the IRS rejects the original offer, they can appeal. The appeals process involves filling out Form 13711 addresses issues raised in the rejection letter. It may require additional documentation to support the decision. In most cases, a rejected offer can be reinstated after an appeal.
Doubt of liability
A taxpayer may have doubts about their tax liability if they’ve received false information from the IRS, such as stating that they were paid in cash rather than in stock. In addition, when the IRS fails to notify the person about a tax assessment or if their wage information returns contain an error, doubts regarding liability develop. To qualify for doubt as to liability offer, taxpayers must provide supporting documentation that proves their concerns. In addition, the documentation must change the IRS’s viewpoint of the situation.
Doubt of liability OICs is conducted the same way as audit reconsideration procedures. The taxpayer must submit a written statement explaining why the tax debt was incorrect, along with the form 656-L Doubt of Liability Offer In Compromise. These processes can be complicated, so be sure to seek legal advice before submitting your request. Doubt of collectibility
Among the various types of tax debt, doubt about collectibility refers to the IRS’s belief that the taxpayer lacks the resources to pay the total amount owed. In some cases, low income and low assets may make it impossible for the IRS to collect the debt. In other cases, the IRS’s efforts to collect may have expired, making the debt uncollectible. The taxpayer should file an appeal and consider all possible collection alternatives in such cases.
In its Rev. Rul. 80-361, the IRS clarified the doubtful collectibility exception. In that case, taxpayers may be required to recognize interest before the borrower becomes insolvent, even if the debtor’s ability to pay is doubtful. However, the IRS distinguished between the periods when the borrower ceases to be a legitimate entity. For example, if the taxpayer stopped recognizing interest before the borrower’s insolvency, that interest might be subject to section 166 as a bad debt deduction.
Tax penalty abatement
You have likely wondered if tax penalty abatement is possible. Unfortunately, many taxpayers are unaware of the process, but this article explains why it is not. You should not try to resolve your debt by yourself. Instead, work with an accountant to help you resolve your tax debt. This way, you’ll avoid any hassle and worry about penalties. And while tax resolution is always preferable, you may also need help with the process.
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Penalty abatement involves presenting a compelling case to the IRS. You must show that a specific situation caused your financial hardship. The application for penalty abatement has to be accompanied by proper documentation. For example, if you were in the hospital, you should attach hospital bills and receipts or other legal documentation proving that you were hospitalized. You must apply within 60 days. If the IRS doesn’t respond within that time frame, you should work with an attorney.