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What Other Information is Needed to Know If I qualify for an Offer in Compromise?

If you want to file for a Georgia Offer in Compromise, and you’ve already got the financial forms filled out, you may be asking, “What other information is needed before I know if I qualify for an Offer in Compromise?”

Hi, I’m Jeff Fouts, a tax attorney located in metro Atlanta, with a state-wide, and nationwide, law practice helping clients who have serious Georgia tax problems.

So, in addition to my financial forms, “What other information is needed to know if you qualify for an Offer in Compromise?”

Other Required Information

In addition to the financial information you’ll need to provide in order to analyze your case, there are other things you may have to do, and other pieces of information you may have to get together, in order to know which solutions you have to solve your tax problem.

These other items include:

- your tax return information,

- your tax debt information,

- which unfiled tax returns to file,

- whether to cause the liability to be a joint tax liability or not, and

- your wage withholdings or estimated tax payment information.

Tax Return Filing

I’ll first discuss tax return filing.  If you owe back taxes, you must make sure you have prepared and filed any unfiled tax returns that are required to be filed.

It is important to realize that, despite what some people may tell you, including accountants, it is often not necessary for you to file all of your unfiled tax returns.  A determination must be made as to which unfiled tax returns need to be filed.

If you file unfiled tax returns that aren’t required to be filed, you may be needlessly increasing your tax debt, and you don’t want to do that.  I have seen folks do this many times, and it is heart breaking.

Whether to Create Joint Liability

Another critical factor to consider, if you are married, is whether to file an required unfiled tax returns as joint or not.

Sometimes it makes sense to file a tax return which has a tax liability as joint with both spouses since it can lower the tax liability.  But most of the time it doesn’t make sense to do that.  One spouse can sometimes escape with little or no tax liability if the tax returns are filed Married Filing Separately.

While this may cause the tax liability to be somewhat greater than if you had filed jointly, which can’t be ignored, nevertheless, most spouses usually want to be kept out of the tax debt mess as much as possible.  The spouse that would be free of any, or most tax debt, usually considers the increase in tax debt to be worth it.  Choosing the filing status of Married Filing Separately may help serve that purpose.

Tax Debt Amount

There are two reasons your required tax returns must be filed.

- I just discussed the first reason, which is that you must fulfill your tax return filing requirements.

- The second reason is that, if you have unfiled tax returns, filing the required ones is the only way you can know what the total tax debt is going to be, including tax, interest and penalties.

If you know what the exact amount of your tax debt is, it helps you to analyze whether your best option is to file an Offer in Compromise or whether it makes more sense to pursue a different option.

Your Tax Withholdings or Estimated Tax Payments

Before Georgia, or the IRS, will allow you to proceed with a tax solution, including the filing of an Offer application, they must know that you have fixed it so that you won’t owe tax debt the next time tax filing season comes along.

If you are a W-2 wage earner, we must determine whether or not you’re paying in enough income tax through your withholdings by looking at how much in tax you are having withheld from your pay check each pay period.

If you are self-employed, or a W-2 wage earner who has self-employed income in addition to your W-2 wages, we look at whether or not you are making estimated tax payments.  These estimated tax payments must be made quarterly.  If you are making estimated tax payments on a regular basis, we review your situation to make sure you are paying the proper amounts.

Neither Georgia, or the IRS, want to enter into a solution with you to deal with your tax problem if you’re going to again owe taxes the next filing season.

Final Assessment of Tax

Another requirement that must be fulfilled before Georgia will process your Offer request is that you must have received a Final Notice of Assessment for all tax years which you owe.

The reason is for this is that in order for Georgia to consider reducing a tax liability, you must first owe the tax, and until the Final Notice of Assessment has been issued, you don’t yet owe that tax debt.  So that document must come first.

Conclusion

As you can see, dealing with your tax problem, and I mean really dealing with it, is not as simple as filling out a few forms, its more like a process.  Some steps of the process are more complicated than others, but all of them must be followed in order to reach the best possible conclusion for your case.

I hope this important video tip has helped you understand the Georgia Department of Revenue a little better and about how tax problems are solved.  Chances are you have questions or concerns about your own particular tax problem.  What I encourage you to do is pick up the phone and call me.  I can answer your questions.  Over the past 20 years I’ve represented clients all across Georgia, and in 50 states and 29 foreign countries, and I welcome your call.  You can reach me at (888) 995-6785 or by email at jfouts@taxhelpattorney.com.  I’m Jeff Fouts and thanks so much for watching.  Have a wonderful day.

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