Expert Tips on Getting an Offer in Compromise Approved
If you have tax debt that you feel you cannot afford to pay, then you may qualify for an Internal Revenue Service (IRS) program that requires you to pay less than the full amount due. This is done through an Offer in Compromise.
An Offer in Compromise (OIC) is an agreement between a taxpayer and the IRS that allows the taxpayer to pay less than the full amount owed. The IRS generally approves up to 40% of OIC applications each year. The biggest factor to consider when it comes to an OIC is that you must prove that you are not in a position to pay your full tax bill. There are many people who want a clean slate when it comes to their taxes. Ask yourself: “How should you make your case?”
Tips for Getting Your Offer in Compromise Application Accepted
- Be thorough: The IRS will not grant an OIC to a taxpayer who does not show the need. You will be asked to provide detailed financial records, bank statements, paystubs and additional paperwork. The more information that you can provide to strengthen your case, the better.
- Stay current on your tax returns: You cannot qualify for an OIC if you have not submitted previous tax returns.
- Deciding how much to offer: To submit an OIC, you will need to carefully follow the instructions on the IRS Form 433. This worksheet will help you determine the amount you want to offer. This calculation is based on the net value of your assets plus your excess monthly income after you subtract all of your monthly expenses.
- Special circumstances: The IRS is known to give consideration to taxpayers with any special circumstances including physical or psychological hardship or those who are of advanced age. The IRS will even take into account the mental illness of a close family member if it has impacted you financially, for example.
- Re-submit if necessary: If the IRS rejects your first application, consider applying again. The IRS will notify you of their decision in writing and will list a reason that the offer was rejected. If you are told that the offer is too low (this is one of the most common reasons for rejection), submit a new IRS Form 656 if your financial situation changes dramatically, or simply attach a letter to your original form if you simply want to increase your offer.
Free Yourself Of Tax Debt Starting Today
Success Tax Relief is a full-service tax firm that can help taxpayers just like you apply for programs such as an Offer in Compromise or even an installment agreement. If you would like assistance, guidance, and help communicating directly with the IRS, call our team of experts today at 877-825-1179 or contact us online. We will sit down with you to discuss the questions you have and help you decide the best path toward being free and clear of your tax debt, once and for all!