An Offer in Compromise allows you to settle your tax debt for less than the full amount you owe. It may be a fantastic option if you can’t pay your full tax liability, or if doing so would create a financial hardship. The Internal Revenue Service(IRS) considers your unique set of facts and circumstances when determining if you qualify. For example, your ability to pay in monthly installments utilizing your gross income and necessary monthly expenses; your equity in your assets such as your home, car, bank and investment accounts.
The IRS generally approve an Offer in Compromise when the amount offered represents the most they can expect to collect within a reasonable period of time. Most Offers in Compromise are settled within 6-12 months.
Before the IRS can consider your offer, you must be current with all filing and payment requirements. If you delinquent tax returns my Firm can prepare them for you. All other payment options must be explored before determining if you qualify for an offer in compromise. You are not eligible if you are in an open bankruptcy proceeding. Any refunds due within the calendar year in which your offer is accepted will be applied to your tax debt. Federal tax liens are not released until your offer terms are satisfied.
There are two available options for payment of an Offer in Compromise:
1. Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, and then pay the remaining balance of the offer in five or fewer payments.
2. 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.
When you are ready to learn more about what we can do for you, we encourage you to contact us.