How to Settle Your IRS Tax Debt Through the Offer in Compromise, Former IRS

Affordable Tax Experts.

I am a former IRS revenue officer and teaching instructor of the IRS tax debt settlement called the offer compromise.

I am a true tax expert for taxpayers wanting to settle for their different for pennies on the dollar.

This blog can only contain some of the material necessary to find out if you have a qualified case to settle your debt to the offer in compromise.

You will have to call us today and speak to true IRS tax debt experts to find out if you are a suitable candidate.

We take no money from any potential clients unless we know they have a very viable chance of acceptance for the offer in compromise program.

You may call us today for a free initial tax consultation.

Below you will find out the basic outline of what the average taxpayer needs to know how to settle their debt through the IRS offer in compromise.

The IRS Offer in Compromise, How to Settle Your IRS Tax Debt

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.

The IRS will consider your unique set of facts and circumstances:

• Ability to pay;

• Income;

• Expenses; and

• Asset equity.

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

The Offer in Compromise program is not for everyone.

If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.

Do you use the Pre- Qualifier tool

The IRS  in the process of making modifications to the Pre-Qualifier Tool application.

If you use this tool, please consider making the following adjustments to your displayed results.

• If you enter an amount on Screen 3 Assets, Line 1 which reads “Total bank Balances,” you may reduce this amount by $1000. The result may not be less than zero.

• If you enter an amount on Screen 3, Vehicle 1, you may reduce this amount by $3450. The result may not be less than zero.

• If you enter an amount on Screen 3, Vehicle 2, and you are making a joint offer with a spouse or other party, you may also reduce this amount by $3450. The result may not be less than zero.

Make sure you are eligible to settle your IRS Tax Debt though the Offer in Compromise

Before we 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. Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.

Submitting your offer in compromise to settle your IRS tax debt.

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;

• $186 application fee (non-refundable); and

• Initial payment (non-refundable) for each Form 656.

Select 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.

Understand the process of an offer in compromise

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.

How to Settle Your IRS Tax Debt Through the Offer in Compromise, Former IRS