An Offer in Compromise is an agreement between a taxpayer and the IRS to settle a tax debt by paying less that the full amount owed. The IRS may accept and Offer when its is not likely that the tax liability can be collected in full and the Offer amount reflects what could be collected over a reasonable period of time.

If you qualify, an Offer in Compromise is the ideal solution for resolving your delinquent tax liability. In the most-recent IRS published statistics, the average tax discount of Offers accepted was 88% (that's only 12 cents paid on every dollar owed).

The two primary ways that an Offer in Compromise can be successfully negotiated with the IRS are: “doubt as to collectibility” (e.g. the taxpayer is unable to pay the full burden), or “doubt as to liability” (e.g. the taxpayer contends that they do not owe the debt). For an Offer in Compromise to be accepted, however, the taxpayer has the burden of proof that they either have no possible means of paying the tax or that they do not actually owe the tax.

The IRS Offer in Compromise process involves completing the appropriate forms, having the necessary records on hand, and being compliant with the IRS tax regulations and filing the Offer for review with the IRS. Once filed, the IRS begins their investigation of the taxpayer’s reasonable collection potential and evaluates their compliance history. Unfortunately, many taxpayers who file an IRS settlement, get it returned due to procedural deficiencies and never make it to a point of final review. Thus, satisfying the many procedural requirements is necessary if an Offer in Compromise is to be reviewed by the IRS and is one of the benefits in hiring an experienced tax professional for filing an IRS settlement.

After the IRS completes its review, it makes a determination either to reject or accept the Offer in Compromise. If the Offer in Compromise is rejected other recourse may be needed such as an Installment Agreement or a Currently Not Collectible status. If the Offer in Compromise is accepted the offer amount is paid and the back taxes are resolved. However, there are certain conditions that must be kept after the Offer in Compromise is accepted such as being compliant with future tax filings and payments. For those that qualify for an IRS compromise it is an excellent way to resolve back taxes and to get a fresh start with the IRS.

If accepted, payment terms for an Offer in Compromise can be in one of two methods: cash (typically within 90 days of acceptance) or short-term deferred payment (paid within 24 months of acceptance).

Call 1-800-685-0382 today for a free consultation to see if you qualify for an IRS Offer in Compromise.