IRS Debt Forgiveness on Back Taxes, Former IRS, Affordable Debt Experts

IRS Debt Forgiveness on Back Taxes, Former IRS, Affordable Debt Experts

Posted on by Michael Sullivan Fresh Start Tax Expert

If you want to seek IRS debt forgiveness for back taxes you will need to consider the IRS tax debt settlement program called the offer in compromise.

The offer in compromise is the only IRS debt forgiveness program that allows you to settle your tax debt for pennies on a dollar.

38% of all offers in compromise are accepted by the Internal Revenue Service but it should be noted that 80% of those accepted are submitted by a professional tax firm that has experienced tax professionals preparing the IRS debt forgiveness forms called the offer in compromise.

My Recommendation as a Former IRS Settlement Agent

I would highly instruct all taxpayers wishing for this IRS debt forgiveness to seek professional tax help not because I am in the business but because I am the former IRS settlement officer  and know the entire offer in compromise program since I was a teaching instructor with the Internal Revenue Service.

What taxpayers do not understand these forms must be very specific, very detailed and that IRS is looking for a way not to work these cases because of all the work that is required.

It is much easier for the IRS agent to decline the IRS debt forgiveness package than to accept it.

To work in offer in compromise accepted package takes anywhere from 20 to 25 hours. Not only that,  it also should be noted that three managers or supervisory signatures are required as well as IRS District Counsel and these packages go up and down the line. It will be well worth the money spent for a taxpayer to find a firm whether it’s us or somebody else that has experienced tax professionals  to submit the offer, if and only if, they are a qualified candidate for the IRS debt forgiveness program called the offer in compromise

You can find the IRS debt forgiveness pre-qualifier tool on our website.

I recommend any taxpayer wishing to submit an offer in compromise to walk through this pre-qualifier tool.


What is a Offer in Compromise

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.

IRS  considers your unique set of facts and circumstances such as :


  • Ability to pay;
  • Income;
  • Expenses; and
  • Asset equity.


IRS will generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time.

Make sure you are eligible before filing for IRS Debt Forgiveness

Before the IRS can consider your offer, you must be current with all filing and payment requirements.

You are not eligible if you are in an open bankruptcy proceeding.


Submit your offer in compromise

You’ll find step-by-step instructions and all the forms for submitting an offer in the Offer in Compromise Booklet, Form 656-B (PDF).

Your completed offer package will include:


  • Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms;
  • Form 656(s) – individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656;
  • $150 application fee (non-refundable); and
  • Initial payment (non-refundable) for each Form 656.


Selecting a payment option for the Offer in Compromise

Your initial payment will vary based on your offer and the payment option you choose:

Lump Sum Cash.

Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.

Periodic Payment:.

Submit your initial payment with your application.

Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.

If you meet the Low Income Certification guidelines, you do not have to send the application fee or the initial payment and you will not need to make monthly installments during the evaluation of your offer. See your application package for details.

Understanding  the Offer process


While your offer is being evaluated:

  • Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);
  • A Notice of Federal Tax Lien may be filed;
  • Other collection activities are suspended;
  • The legal assessment and collection period is extended;
  • Make all required payments associated with your offer;
  • You are not required to make payments on an existing installment agreement; and
  • Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.


Contact us today for a free tax evaluation on the IRS debt forgiveness program on back taxes called the offer in compromise.

You will speak to a true tax professional who is both affordable and experienced and will give you an honest opinion on where you stand with the IRS.


IRS Debt Forgiveness on Back Taxes, Former IRS, Affordable Debt Experts

About Michael Sullivan

Michael Sullivan is Former Award Winning IRS Agent and Teaching Instructor with the Internal Revenue Service. Mr. Sullivan worked in the local, district and regional offices of the IRS. Mr. Sullivan has been in private practice since 1982 and is a tax expert in the field of Federal and State Tax Resolution. Connect with Michael Sullivan on Google+

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