Question

Indicate whether each of the following statements is true or false.

a. The government never pays a taxpayer interest on an overpayment of tax.

b. The IRS can compromise on the amount of tax liability if there is doubt as to the taxpayer’s ability to pay.

c. The IRS is required to accept Colin’s application for an installment plan that delays the payment of $6,000 outstanding tax liability.

d. The offer in compromise program attempts to allow upper-income taxpayers additional time in which to pay delinquent tax amounts.

Answer 1

a	FALSE	The government pays a taxpayer interest from 45 days after the return actually is filed and no refund has been paid
b	TRUE	The IRS can compromise on the amount of tax liability in case of doubt in taxpayer’s ability to pay.
c	TRUE	The IRS can accept application for an installment plan if the outstanding tax liability does not exceed $10000
d	FALSE	The offer in compromise program attempts only occurs when there is doubt as to the taxpayer’s ability to pay.