Having been a former IRS Agent and Instructor in Offers in Compromise, I have seen so many mistakes all because the timing of the filing of the Offer was not planned.  It takes a skilled professional to gets an Offer in Compromise through the careful eyes of the IRS. Individuals who try this on their own will soon find this is no picnic and their chances of acceptance are very slim.

Again, Offers in Compromise are all about the timing. The IRS takes a careful look at all of your income and expenses and will require verification of every number that you place on the 433-A,  financial statement.   W-2’s or 1099’s, bank statements, bills and cancelled checks are all examples of verification that are needed to back up your financial statement.  The financial statement is required!  Here is one of the best tips you will ever get. Plan a date when you want to file the Offer in Compromise that fits the period of time when your income is the lowest and your expenses are the highest.

The IRS does a careful study on your current income and expenses. They will conduct a 6 months analysis of this. You must plan to file the offer in compromise when your income is at the lowest point.

Do not file your offer in compromise until you have walked through this exercise. If you are planning to get an increase in income, file your offer immediately. The more available income you have, the more you will need to pay.