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 An Offer in Compromise (OIC) is one repayment plan that you can negotiate with the IRS to reduce your tax debt. With an OIC, you are proposing paying a lesser amount to the IRS, based on your ability to pay. This is a good strategy, but bear in mind, that it is not easy to obtain this particular outcome, and almost all aspects of your life will be under scrutiny. However, if you come out owing much less than before or not at all, it is well worth it.

There are different types of penalty abatement. Which type you may qualify for depends on several factors. 

· IRS First-Time Penalty Abatement

If you have a clean record with the IRS over the past few years, you might be able to make a tax penalty disappear through the IRS’s First-Time Abatement program. This type of relief can be applied regardless of the amount of your penalty. A first-time abatement waiver is only available for the failure-to-file, failure-to-pay, and failure-to-deposit penalties.

· Reasonable cause penalty relief

The IRS can also waive certain penalties if you acted with reasonable cause and in good faith. Whether you acted with reasonable cause is determined on a case-by-case basis and depends on all the facts and circumstances surrounding the case. The reasons that qualify for relief also depend on the type of penalty you owe. However, you can’t eliminate all penalties based on the reasonable cause. For example, the reasonable cause provisions don’t apply to estimated tax penalties.

  · Statutory Cause penalty relief

Failure-to-file and failure-to-pay penalties

If you’re hit with an IRS penalty for filing your tax return late or not paying the tax you owe in a timely fashion, the IRS can waive the penalty if you have a good reason for not fulfilling your tax obligations such as illness, tax preparer delays etc.

Statutory exception penalty relief

In some cases, the U.S. tax code might provide a provision that triggers penalty relief. For example, tax law states that a penalty for the underpayment of estimated taxes is waived for certain newly retired or disabled people.

Tax administration penalty relief

The IRS can establish widespread penalty relief policies that impact many people under specific conditions. For instance, this type of administrative penalty waiver might be announced if there’s an IRS delay in releasing tax forms or guidance. An administrative waiver can be revealed in either a policy statement, news release, notice, or other formal communication stating the IRS penalty relief policy.

Interest relief

You should also realize that the IRS charges substantial interest on unpaid taxes. That interest keeps growing until your balance is paid in full. Interest on unpaid taxes generally can’t be waived, but it can be reduced if it’s applied because of an unreasonable error or delay by an IRS officer or employee. When it comes to interest on a penalty, the IRS will reduce or eliminate the interest if the penalty itself is waived.

If you owe taxes to the IRS, but can’t afford to pay, or can't pay without significant hardship, you may qualify for “currently not collectible” (CNC) status. Getting into CNC doesn’t make your debt go away, but the IRS will stop trying to collect the money (except from refunds) for as long as you are unable to pay. You will have to continue to prove this, and we will educate you as to how for the future. 

 A Partial Payment Installment Agreement (PPIA) is a monthly payment plan option for taxpayers who have a tax balance but are unable to satisfy the balance within the remaining time the IRS has to collect, called the Collection Statute Expiration Date (CSED). The CSED is typically 10 years from the date of the tax assessment; however, it can be extended for various reasons. A PPIA allows you to pay a monthly amount that you can afford until the CSED expires, at which time, any remaining balance owed will cease to be collected. A PPIA can prevent the IRS from taking further collection action, such as levies and seizures. 

This installment agreement lasts for 72 months (or before the collection statute expiration date, whichever is earlier) The Assessed tax balance must be $50,000 or less. The IRS will require auto payments if the balance is between $25,001 and $50,000. This is a desirable option for a lot of our clients.

Innocent spouse relief can relieve you from paying additional taxes if your spouse understated taxes due on your joint tax return and you didn't know about the errors. Innocent spouse relief is only for taxes due on your spouse's income from employment or self-employment. 

 Injured spouse relief lets you reclaim money taken from your tax refund to cover your spouse's debts. Innocent spouse relief relieves you from paying additional federal income tax owed by your spouse due to errors on a joint tax return. 

We offer a FREE, comprehensive consultation via telephone or video. We will also travel to where you are and meet in person. That is right!!! We will come to you. 

During the consultation, we will gather information such as the current amount owed to the IRS and/or state, your income and expenses (estimated)and demographic information. We will also answer any questions that you may have and address any concerns. We want you to feel comfortable with us.

Once everything has been explained to you in depth and you agree, you would then retain our services if you desire. You will pay us an initial "investigation/discovery fee" This phase of our service is where we pull tax transcripts, look into unfiled years, collect notices you have received and three (3) months of accounts payable and receivable. Essentially, we need everything to create a financial portfolio that we will base your resolution on. 

The initial retainer fee is a percentage of the current debt. We feel that our fees are very reasonable and below the industry standards. You will be made aware of this fee the day of the consultation and there will be no surprises. We believe in and practice transparency.

Once our specialists have had an opportunity to create your financial portfolio and have digested the material, they will inform you of potential opportunities to resolve the debt. You will be informed which solution will likely work best for you, the pros and cons of each and which will likely be accepted by the IRS or state. We will make the recommendation. However, the route we ultimately take is up to you as the client. Hazlewood & Associates makes NO guarantee of the outcome. 

At this point, we will go over our representation/resolution fees. This is based on factors such as amount owed, the type of resolution we are attempting to achieve and if we need to file missing tax years. The IRS and state will not work towards a solution until all years are filed and you are fully compliant. You will know all fees up front. There will never be a change or surprise charge. 

Everything will be approved by you first and stated in the client agreement. Unlike other firms and companies, we do not charge a "monthly fee" The only time you will pay monthly is if we set up a payment plan.

 The payment plan options are three (3), six (6), eight (8) or twelve (12) months. The amount of time allowed to pay depends on the approximate time it will take to resolve the case. This translates into the more that is owed, the longer you will have to pay.

During this time, your resolution specialists will be working diligently to resolve your issues as quickly and efficiently as possible. One huge difference in our firm and others is that we keep you involved. Every letter, offer or fax, you will review and sign before it is sent to the taxing authority. Any video or phone conference, you will be present for and advise the IRS or state representative that we will be speaking for you.

 You will be there every step of the way. We take great pride in this as it promotes transparency and good business and helps you learn how to address the issue should it ever arise again. We would rather you be prepared to represent yourself than have to spend more money in the future. 

Hazlewood & Associates cannot provide an exact time frame to resolution or the outcome in general. We cannot stress this enough.... If a firm or company guarantees any particular outcome, they are not being honest with you. Alot of representatives depend on commission and have a higher personal agenda to "sell'' to a potential client.

Once we have exhaustively worked the case, we will then present you with what we believe is the most desirable and feasible option for you and/or your business. We will have a couple of options, and we will explain the pros and cons of each and why we recommend a certain one.

 You maintain the right to ask questions and disagree with what solution we propose. However, we assure you that the solution we recommend is based upon what is most likely to be accepted by the IRS or state and serves in your best interest. We will openly discuss this with you and work with you to determine the definitive solution. 

Once you have agreed to and approved the offer we have presented, we will then prepare the appropriate paperwork and get that submitted to the IRS or taxing authority. We will do our best to get the offer prepared and mailed to you within seven (7) business days to sign and return. Again, nothing will be presented or mailed without your signature and approval.   

 The IRS typically takes between 4 to 12 months to process an Offer in Compromise (OIC). The OIC takes the longest to get a decision on, though complex cases can take longer. With other resolutions (Abatement, CNC etc.), the timeline depends on factors like the completeness of your application, your financial situation, and the IRS's current workload. The average time to resolution rangers between three (3) and nine (9) months.

This is not a fast-moving process. It is, indeed, a marathon and not a sprint. Hang in there and everything will come to pass.