If you owe back taxes to the government you may have already heard about Offer in Compromise options. Basically this is an agreement between you and the IRS to pay a reduced total of the taxes owed. If you owe back taxes to the state of California, you can also take advantage of the Offer in Compromise option.
California Offer in Compromise has now made it possible to fill out one form regarding taxes owed to California and to the federal government. This is a major step forward in making it possible for those owing back taxes to expedite the process of asking for an Offer in Compromise.
In order to get approved for a California Offer in Compromise there are factors that must be considered. You must be able to prove that you are unable to pay the full balance owed now and in the foreseeable future. You must be able to verify your income, assets and expenses.
Keep in mind that a California Offer in Compromise will not be approved if your income or assets indicate the ability to pay the entire balance owed. Therefore you must be able to prove financial crisis.
Other criteria that will be taken into consideration by both the government and the state of California include:
- All returns in question must have been filed prior to requesting the California Offer in Compromise
- There must be no fraud assessment
- The offer must be in the best interest for California
- Prior payment arrangements must be continued until the California Offer in Compromise is accepted and granted.
There are very specific requirements that must be met prior to even considering requesting an Offer in Compromise. You should consult a tax professional to assist you with gathering the proper documentation and financial information before contacting the government or the state of California.
Often times the tax professional can act on your behalf and handle all correspondence with the IRS and with the state of California throughout the Offer in Compromise process.
Owing back taxes can be extremely overwhelming and stressful. However, never allow fear or procrastination to prevent you from contacting the IRS, the state of California or a tax professional. You need to realize that the penalties and interest continue to increase your balance owed. In a very short time your debt could double or even triple if you do nothing at all.
The current economic crisis has caused many Americans to fall behind on their taxes. You are not alone. Your circumstances will be evaluated on their own merit, as each individual is unique. If you are experiencing a financial crisis you need to take action. Realize that the state of California nor the IRS are out to get you, rather they want to help you get caught up and pay your debt. Payment arrangements can be set up and your balance can be lowered with a California Offer of Compromise. You simply need to start the process by communicating your situation and not procrastinating.
Taking the initiative to contact the state or the government shows that you do want to resolve the situation and are not hiding or running from it. That alone will help in your negotiation process.