Most of the taxpayers find it hard to resolve the tax debts. There are many ways to deal with this situation. One of the most effective ways is offer in compromise. Those people who are in the verge of financial crisis can opt for this. The concept revolves around settling the tax debts of a taxpayer.

It is a proposal by which the debt is settled for a lesser amount than what he owes. It is normally an agreement between the tax department and the taxpayer. This settlement is under the discretion of the government. The worst part is that not all the taxpayers can be benefited by this agreement.

This is because of the fact that only less than half of the requests submitted by the taxpayers are accepted by the department of taxation. The taxpayer can also go for appeals if they request is rejected by the taxation department.

The major condition to be fulfilled is that you will have to prove in front of the taxation authorities that you are facing financial crisis. You must also understand that applying for this offer is a very lengthy process. There will be special fess for applying for this offer too.

You will have to fill some forms and these forms must be submitted along with the required fees. If you are below the poverty line, you will be exempted from many fees. The major requirement is the information statement on the personal and financial details of your spouse and you. You may also require many financial documents for supporting your request for offer in compromise.

If you are making disclosures in front of the tax department, you must be very careful. The disclosures you make will adversely affect you in the future. The negotiation process is so long that the interest of the tax amount will keep on accruing during that period. If the request for this offer is rejected, the taxpayer will have to pay an amount greater than the actual tax amount. There is a big chance for the negotiation to fail.

There are many conditions to be fulfilled for qualifying in the taxation departments criteria. If a request is accepted by the department the taxpayers can avail the benefit, otherwise he will have to pay the full tax amount. For this too, there are many options in the payment of the tax amount.

You can make use of the installment agreement too as it will help you in paying your tax amount in small installments. It is an agreement between the taxation department and the taxpayer that allows the taxpayer to pay the tax debt in simple installment form. This is most commonly used for the unfiled tax returns.

The negotiation process can be done with efficiency if you have the access to a reputed tax attorney. You can go to a tax law firm so that you can avail the services of a good tax lawyer. You can make use of these techniques for your tax related problems.