Effective Tax Administration Attorney In Chicago, Illinois

Effective Tax Administration (ETA) is one of the grounds for consideration of an Offer in Compromise (OIC), a settlement option with the Internal Revenue Service (IRS) where a taxpayer can settle their tax debt for less than the full amount owed. Effective Tax Administration is one of the three criteria under which the IRS may accept an Offer in Compromise.

Under Effective Tax Administration, the IRS considers the following circumstances:

Economic Hardship: If paying the full tax debt would cause economic hardship for the taxpayer, the IRS may accept an OIC if it is determined that collecting the full amount would be impractical. This could be due to exceptional circumstances.

Exceptional Circumstances: If there are exceptional circumstances that would make the collection of the full amount unjust or unfair. This could include serious medical issues, personal hardships, or other unique situations.

Public Policy Considerations: If public policy considerations support accepting an OIC. For example, if the taxpayer's situation involves unique public policy concerns, the IRS may consider an offer even if the taxpayer has the ability to pay the full amount.

It's important to note that Effective Tax Administration is a subjective criterion, and the IRS reviews each case individually. Taxpayers seeking an Offer in Compromise under the ETA category must provide detailed information and documentation to support their claim that paying the total amount would result in economic hardship or would be unfair and inequitable. Consulting with a tax professional or tax attorney is often advisable to navigate the complex process and increase the chances of a successful Offer in Compromise.