Have you ever had to deal with a Maryland Offer in Compromise? It sounds complicated, but it doesn’t have to be. You and the state tax administrator should work out an Offer in Compromise that you can live with. You may get the relief you need from the extra financial burden of property taxes if you do.
An Offer in Compromise is a bargain. It is when the Internal Revenue Service agrees to accept less than what is owed on delinquent tax debts in return for complete payment of the outstanding balance at the end of the year. It is a tax debt relief plan that Maryland taxpayers should consider using. Contact your state tax debt relief department to learn more about them.
When a taxpayer receives a Maryland Offer in Compromise, they must either accept it or not. The Internal Revenue Service must repay the excess amount plus interest and fees if a taxpayer accepts it. If a taxpayer does not accept it, the Internal Revenue Service has three months to send notice of intent to the state tax liability account. The taxpayer can then choose to accept the Offer in Compromise or not. A taxpayer who does not accept the Offer in Compromise has thirty days to file a Notice of Non-Acceptance with their state tax liability account.
How does one receive an Offer in Compromise? The Internal Revenue Service will send the taxpayer a letter of a proposal describing how the Offer in Compromise can help the taxpayer. If a taxpayer agrees to the Maryland Offer in Compromise, the IRS will assign a representative to handle the request. At least two other tax liens must be satisfied before the Maryland Offer in Compromise will be accepted. These include the tax liability and the amount of taxes owed.
What happens if a taxpayer does not accept the Offer in Compromise? The Offer in Compromise is considered a failure to pay within five days unless the taxpayer can prove that he or she was unable to pay the amount of taxes owed within five days. If the taxpayer can’t show that inability, the Maryland Offer in Compromise is declared a failure to pay the required taxes. There is a carve-out in the Offer in Compromise for those taxpayers who were “in danger of defaulting.” The Maryland Offer in Compromise is used in conjunction with the Home Affordable Modification Program (HAMP) for these taxpayers.
Why would the Internal Revenue Service use this type of compromise? The IRS uses an Offer In Compromise to collect a certain percentage of the debt owed to the government. The percentage is usually between forty and sixty percent. The Internal Revenue Service is also able to seize property owned by the taxpayer under the compromise if the taxpayer fails to pay the debt. The property seized can be sold to pay the debt, but if the property is used for other purposes, the property belongs to the taxpayer only.
When should you consider using an Offer in Compromise? If you are going to hire a lawyer to help you with your taxes owed in Maryland, it would be wise to seek legal advice concerning the tax mitigation offer. Many tax attorneys specialize in tax compromise agreements and can help you with the negotiation process. You may also want to seek out a Maryland tax lawyer who handles the negotiations between the taxpayer and the IRS. An attorney specializing in tax issues can explain the ins and outs of an Offer in Compromise and why it is often used when the IRS wants to compromise.
If you owe money in Maryland, you may be able to settle your debt without paying the entire amount. Even if you don’t have enough money to settle your debts, you may be able to settle your tax obligations by paying less than the full amount you owe. The IRS allows taxpayers to settle their outstanding balance through a Maryland Offer in Compromise, provided the taxpayer can demonstrate that they can pay the total due in two years. The taxpayer must attach documentation proving that he or she is unable to pay the debt in the next two years. For more information. Contact IRS Help Attorneys now.
