IRS (Internal Revenue Service) is of the U.S Federal Government. It is an agency responsible for tax collection along with the enforcement and implementation of the Internal Revenue Code. Income tax holders can file an Offer in Compromise wherein they offer for less tax payment from the full tax debt to the IRS. This is one of the ways to get rid of tax debts.
The IRS at its discretion may accept this offer on doubt of full tax payment or actual liability. Its application requires you to fill Form 656 and 433-A. The amount payment to the IRS is to be calculated using Form 433-A Worksheet. There are also certain terms and conditions which are supposed to be followed while filing an Offer in Compromise IRS. You also need to protect it from periodic revokes by the IRS by filing and paying taxes on time for the next five years. You can successfully render the benefits by submitting the full backup documents to sustain your offer submission.
IRS carries out an auditing process which is a review or an examination of the tax holder’s account and monetary information to guarantee that it has been reported appropriately in accordance with laws of taxation so that the tax amount reported is verified and accurate. IRS Audit not always the cause of an error being made by the tax holder. Sometimes it is done on a random basis, when the documents don’t match the information being reported and when transactions or issues with business partners, other tax payers or investors are found.
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