Taxes Must be Assessed by the IRS before Accepting an Offer in Compromise
QUESTION:
I have not filed my 2006 tax return yet because I know I am going to owe the IRS money. I also owe personal income taxes for several past years, but those returns have been filed. Can I file an offer in compromise now that includes the 2006 taxes?
ANSWER:
In order to file an offer in compromise, you must have all of your tax returns for the last seven years filed. However, what happens a lot of times is the tax return is filed, but it takes several months for the IRS to actually assess the taxes against the taxpayer. The Internal Revenue Manual states that a tax liability may be considered for compromise before it is assessed, however, before a compromise can be made final the taxes must be assessed by the IRS. This is because before the tax is actually assessed, there is technically no balance due to the IRS. In theory, this could pose problems, but practically speaking it takes several months for an offer in compromise to be considered for acceptance by the IRS so there is generally plenty of time for the tax to be assessed. Once you are ready to take care of your tax liability, I can assist you in determining what steps need to be taken to get your situation ready for filing an offer in compromise. Your initial consultation is free and you will be under no obligation. The sooner you take action to solve your tax or other debt problem, the sooner you can rest easy and cease worrying about those taxes and debts! My firm also handles divorce, real estate, and probate matters. We also prepare wills, powers of attorney and provide other estate planning services. Please call today for a free consultation.
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