IRS Offer in Compromise – Hope When You Can’t Pay.
If you’ve fallen behind on your taxes and can’t pay, the IRS may be willing to settle for lass than you owe.
Less Than 2 Minutes Could Save You Thousands.
What is an Offer in Compromise?
An Offer in Compromise (OIC) is a settlement agreement between you and the IRS that allows you to settle your debt for far less than you owe. It’s about as close as you can come to tax debt forgiveness. Although it may sound too good to be true, it is a legitimate tax relief option for those who qualify.
To make an Offer in Compromise request, you must submit a $205 application fee (non-refundable), Form 433-A (OIC) or Form 433-B (OIC), Form 656, and the initial payment (non-refundable). The initial payment will depend on the amount of your offer and the payment option you choose.
Getting approval for an Offer in Compromise is never guaranteed, but the IRS must give properly submitted requests fair consideration.
Offer in Compromise Qualifications
The IRS has strict qualifiers to determine who is eligible for tax forgiveness. The first thing they consider is your reason for applying. The IRS will only consider OIC if one of the following is true:
The IRS may have incorrectly determined the amount you owe
The tax debt is not fully collectible (your assets/income are less than the amount due)
Paying the tax debt would cause undue financial hardship (effective tax administration)
In addition, the following requirements must also be met before your Offer in Compromise is considered:
You’re up-to-date on all tax returns
You include an IRS bill for at least one tax debt in your offer
You’re not delinquent on any estimated tax payments for the current tax year (if applicable)
You don’t have an innocent spouse claim open with the IRS
The IRS is not currently auditing you
Your case hasn’t been sent to the Department of Justice
You’re not currently in bankruptcy proceedings
Business owners with employees also need to make all required federal tax deposits for the present quarter
Not sure if you’re eligible for an OIC? Use our Offer in Compromise Calculator.