AN OFFER IN COMPROMISE

If you’re having trouble affording payments to the IRS to settle any outstanding debts, consider applying for their settlement program, an Offer in Compromise. The Internal Revenue Service offers this as a solution to those who owe more money than they can afford to pay.

This allows you to eliminate your tax debt and is a great chance for a fresh start. If approved, the IRS accepts a lesser amount – sometimes even just a fraction of what’s owed – to settle your debt.

However, it isn’t always easy to gain approval due to its strict criteria. The IRS considers your income, assets, expenses, ability to pay, and whether paying the full amount would cause financial hardship.

The following process is tedious, and your odds for acceptance increase significantly when you have experience negotiating with the IRS.

Information You Need to Submit an Application for an Offer in Compromise

It’s important to remember that the IRS wants its money and will only accept an offer in compromise if it thinks it wouldn’t receive any money otherwise. You must be current with all filing and payment requirements to apply.

Additionally, you cannot be in the process of filing bankruptcy.

After supplying the IRS with your name, address, social security number, and the amount of tax debt you would like it to consider for this program, you need to supply details about your income, assets, and expenses. In addition to wages, your personal income can include:

• Business profit
• Self-employment income
• Rental income
• Child support or alimony
• Interest on investments

Your assets can include things such as:

• Stocks and bonds
• Resale value of your personal vehicles
• Market value of your home
• Balance of your retirement savings accounts
• Balance of bank accounts, including checking, savings, and investments

For the expense section, you should only include items you pay regularly. These may include:

• Rent or mortgage
• Child support or alimony
• State and federal taxes
• Daycare costs
• Costs to maintain a vehicle
• Auto, health, and life insurance

Compiling this information and completing the application correctly can be challenging even for tax practitioners who don’t have expertise in dealing with the IRS. Your CPA most likely doesn’t have experience with resolving back tax issues. That’s why we recommend working with a specialized tax resolution professional like us to better understand this option and increase your chances of approval.

You can find more information about the IRS Offer in Compromise on the IRS website here.  If you want help with your back tax problem, contact us today for a consultation.

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Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax Problem Solutions as well as an Enrolled Agent and a Certified Tax Resolution Specialist.
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Now What? I Got A Tax Notice From The IRS. Help! Defining and deconstructing the scary and confusing letters that land in your mailbox. Jeff defines and deconstructs the scary and confusing letters in a fashion that mixes attention to detail with humor and an intricate clarification of what is what in the world of the IRS.

The book is available in paperback and ebook on https://Amazon.com
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For more on SFS Tax Problem Solutions, visit: http://sfstaxproblemsolutions.com/
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738 Colorado Avenue Stuart, FL 34994
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Phone: 772-337-1040
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