When the typical Oklahoma resident receives a notice of back taxes from the IRS, his first reaction usually is, “This can't possibly be right.” Clearly, a bureaucrat at IRS headquarters failed to carry the “4” when adding up the taxes owed, or one of your deductions (say, your monthly mortgage payment) was disallowed by mistake.

If you seriously believe you received your bill in error, you are free to file a “doubt as to liability” claim under the government's “Offer in Compromise” program—but you must provide solid, indisputable proof that the IRS made an error in order to have any hope of a reduction in, or eradication of, your bill.

What happens if your “doubt as to liability” claim is denied? Well, all hope is not lost: you still can file for an Offer in Compromise for “doubt as to collectability” or “effective tax administration.” The first option means you simply don't have the financial resources necessary to pay the bill, and you need to work out an installment plan whereby you pay a reduced amount. The second means you are suffering from extreme hardship and it simply would be “unfair” for the IRS to collect the full amount owed.

As to whether the IRS revenue officer will be suspicious of this second petition—considering that you weren't able to back up your initial “doubt as to liability” claim—that's something you need to discuss with an experienced tax lawyer.

Have you been hit with a huge tax bill, complete with penalties and back taxes? You need to hire a lawyer today, who will work with you hand in hand to battle the huge bureaucracy that is the IRS. Call the Oklahoma tax experts at Travis W. Watkins, PC (800-721-7054) to find out what we can do for you!

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