WHAT IS AN OFFER IN COMPROMISE?
An Offer in Compromise (offer) is an agreement between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed.
From the IRS Website: “An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship”.
The IRS will consider the following when viewing an Offer in Compromise:
- Taxpayer’s Ability to Pay
- Taxpayer’s Income
- Taxpayer’s Expenses
- Taxpayer’s Personal Asset(s)
The IRS should approve an offer in compromise when the amount offered represents the amount the IRS can expect to collect within a reasonable period of time. Not all Taxpayers are eligible to submit an Offer in Compromise.
Are you Eligible to submit an IRS Offer in Compromise?
You can check your eligibility here -> IRS Offer in Compromise Pre-Qualifier.
To qualify you must have:
(1) filed all tax returns you are legally required to file,
(2) have received a bill for at least one tax debt included on your offer,
(3) make all required estimated tax payments for the current year, and
(4) make all required federal tax deposits for the current quarter if you are a business owner with employees.
*Your offer will be immediately returned without consideration if you have unfiled tax returns.
If you qualify our tax attorneys can assist you in preparing and submitting an offer.
Do you need to speak with a local tax attorney? Please call (212) 520-2906 to speak with an Alizio Law tax professional.