An IRS Offer in Compromise allows you to establish an agreement with the Internal Revenue Service (IRS) to pay less than what is owed. This is usually the option an individual must take if he or she cannot pay the full tax liability because of a financial hardship. An Offer in Compromise is based on many factors, some of which include your age, current health, income, and assets. However, all taxpayers may be eligible for an Offer in Compromise. When taken into account, these factors (and others) determine your eligibility and the amount the IRS may be willing to accept an Offer. IRS may generally approve an offer if there’s a possibility that the tax payment is close to the original amount.
IRS generally approve an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time. Explore all other payment options before submitting the offer. However, one must understand that The Offer in Compromise program is not for everyone. To qualify, as previously stated, you must prove to the IRS that you suffered through financial and economic hardship to not fully pay your taxes.
When can an Offer in Compromise be made?
The ultimate goal is to reach a settlement, reduction and/or elimination of the tax liability that is in both parties (Government and Taxpayer) best interest. However, the preparation and submission of an Offer can be a difficult process requiring knowledge of IRS procedures and regulations.
A tax debt can be legally compromised for one of the following reasons:
- Doubt as to Liability
- Doubt as to Collectibility
- Effective Tax Administration
There is a thin line between acceptance and rejection of an Offer. Michael C. Whelan JD CPA, being a former IRS attorney, can possibly negotiate a fair and reasonable Offer in Compromise on your behalf. Contact our office at (847) 298-9275 to schedule an appointment for a consultation.