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Richardson TX - Doubt as to Liability OIC when you don't owe the tax!
When most of us think of an Offer-In-Compromise (OIC), we think about where a Taxpayer owes and agrees that they owe an amount to the government, are unable to pay, and qualify to settle the debt with the government using an OICfor less than the full amount. This is the typical example of an OIC.
However, there are three types of Offers-In-Compromise:
Doubt as to Collectability (the most frequent OIC referenced above), Doubt as to Liability, and Effective Tax Administration
Today we’ll discuss Doubt as to Liability and when we would use that option to deal with a tax issue. With Doubt as to Liability, the argument is not that the taxpayer can’t pay the tax but that the underlying liability is incorrect, and that they don’t owe the government the money. Typically, this happens when a taxpayer goes through audit, they don’t agree with the findings, perhaps the auditor simply ignored the documentation supplied, but they don’t go to appeals to fight the tax assessment. Filing a Doubt as To Liability is One Option to address this issue once the tax has been assessed.
The assessed tax then goes into the collection group. One option at this point is to file ... more
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