IRS TAX PROBLEMS – Is an “Offer in Compromise” right for you?
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 if paying your full tax liability creates a financial hardship.
However, the Offer in Compromise program is not for everyone. Before the IRS can consider your offer, you must be current with all filing and payment requirements.
Unless you have a valid extension, the IRS will return any Offer in Compromise application if your returns are not filed and any required down payment with your application will be applied to what you owe.
In addition, you should explore all other payment options before submitting an offer. If you can pay the full amount, you will find payment options on IRS website at “IRS.gov/payments”. If you can pay through a payment plan, you may be able to set it up using our online payment agreement application.
Before you take the time to prepare and submit an offer application, or pay someone to do it for you, consider using the IRS “Offer in Compromise Pre-Qualifier”. This simple online tool will confirm your eligibility and provide you with an estimated offer amount.
If you decide that an Offer in Compromise is right for you, you’ll find step-by-step instructions and all the forms for submitting an offer in our Offer in Compromise Booklet, IRS Form 656-B. Prepare your offer application carefully, and be sure to include all required forms and documentation. Also, don’t forget to include the application fee and initial payment with your application if necessary.