These negotiations were put in place by the Internal Revenue Services to assist businesses that can’t afford to pay their taxes. It is important that you are able to prove that by paying your taxes, your business will be in serious financial trouble with the risk of closing the doors, even going into bankruptcy.
Before you make any arrangements its worthwhile going through your accounts, get your profit and loss statements in order and know your projected income along with your current expenditure. By doing this you will get a good indication on what you can afford to pay without putting your business finances at risk.
By going through your expenses and income you will have a good idea on the monthly instalments you can pay without putting your business at risk. Be realistic in your calculations and have a clear indication on how these payments will affect your cash flow.
Remember to keep cash aside to pay for rental and stock. Without stock you are unable to bring in those essential sales which will help you pay off your debt.
Determine if you can afford to pay a lump sum towards the debt. In many cases the offer in compromise calculator will require an upfront payment and then followed by regular monthly payments to pay off the amount owed.
This is where a specialist company comes into play. They are able to take all your finances that you give them and work out the best possible plan to save your business and any risk to your assets and family.
Using the information you provide they use an offer in compromise calculator to come up with a win-win situation that suits your finances and ensures that the debt is paid.
With an offer in compromise, your debt can be dramatically reduced. Remember that the IRS would prefer to get some money from you for your taxes rather than receive nothing at all, therefore they are more flexible regarding payments and agreements to ensure that the payment doesn’t ruin the business in the long run.
There are set criteria which needs to be met, which is another reason why it’s imperative you use a company to assist you rather than trying to manage this yourself.