How Does IRS Find Out Tax Evasion?- Read On!
The Tax Compromise Improvement Act of 2009 is a bill that was introduced in Congress by Ways and Means Oversight Subcommittee Chair John Lewis and Republican Charles W. Boustany Jr. to simplify the process of reaching a Tax Compromise. This bill would help taxpayers with debt problems get out of the red ink of owing taxes. The tax reform legislation will make it easier for taxpayers to settle their tax bills and avoid bankruptcy.
Tax Compromise has many benefits. It helps the government collect revenue by reducing debtors’ monthly payments. In addition to lowering monthly payments and interest, it also stops IRS collection efforts. Unfortunately, the process of settling a tax debt can be time-consuming and expensive. Thankfully, there are some ways to save money by opting for a Tax Proposal. Here are some of the advantages of a Tax Compromise:
o Offer in Compromise – This is a complicated process that requires several forms and application fees. The taxpayer must provide financial details and documentation to the IRS. The IRS will be able to approve the offer if it meets one of three conditions. If the taxpayer’s financial situation is improving, then the offer is more likely to be accepted. The accepted offer can be paid in one lump sum or over a period of time directly to the IRS.
o Advance payment from BIR – When a taxpayer’s Tax Compromise application is denied, the BIR will keep the advance payment and apply it to their tax liabilities. The taxpayer can accept the BIR’s stand and file a refund request, but this is a time-consuming process. If the taxpayer does not agree with this decision, he or she may recover the advance payment from the BIR through an administrative claim or a lawsuit.
o Offer in Compromise – The IRS will accept a reduced offer from a taxpayer when they cannot pay their full tax liability. A taxpayer can be approved for a lower offer if they can’t afford to pay their full tax liability. It is possible that he or she is able to work out an arrangement with the IRS. However, if they can’t afford to pay the full amount, they won’t accept the offer.
o Offer in Compromise – Once approved by the IRS, an Offer in Compromise is a proposal to settle a tax debt. An Offer in a Tax-Compromise is a great way to avoid bankruptcy and reduce the amount of money you owe. Nevertheless, the IRS must approve the offer in order to accept it. If the taxpayer is not able to pay the full amount, the IRS won’t accept it.
o Payment Options – The IRS offers a Tax Compromise as a solution for its clients who can’t pay their full debts. It will no longer retain the refunds of taxpayers who qualify for this program. But, the taxpayer must be willing to pay the entire amount to be approved. If the offer is rejected, he or she can opt for other options such as installment payments or a cash-out.