After the IRS has figured out that you owe back taxes, you will have a few choices to rectify the outstanding debt. The most common way that individuals pay off their debt is by establishing a debt repayment plan. If you have some cash saved up, an offer in compromise will be a much better solution to paying off your debt.
Essentially, an offer in compromise is a deal that is agreed upon between the IRS and your tax lawyer that will significantly reduce the amount of money that you owe to the IRS and end your debt in one lump sum payment. The Internal Revenue Service and your tax attorney will work nonstop in order to come up with an offer that is affordable. If you cannot come up with the money in a lump sum that the Internal Revenue Service is looking for, you will have to explore another choice.
By Employing a tax lawyer to represent you, you will have a lots better chance at getting the IRS to agree to an offer that is possible. Quite often many people ignore the IRS when they perform an audit which requires them to discern an amount of money in which they consider that you owe the Internal Revenue Service. If you do not submit to their petitions for documentation, or don’t meet the needs that they have set forward, they will come up with the amount that you are fined.
In many conditions, this dollar amount is extremely increased. A compromise offer will bring the dollar amount that you owe the government down to a more realistic amount. This number will be reduced, making it much more probable that you will be able to pay it down. As soon as the offer is processed through and the Internal Revenue Service accepts it, you will have to pay the total sum and the debt will be considered fulfilled.