Offer in Compromise: 5 Tips to Increase Your Approval Chances
If you owe an extreme amount of debt to the IRS, it may seem that you will never be able to pay it off. You might be kept up at night thinking about how the IRS could collect the debt, including putting a levy or lien on your car, house, or other property.
But you might be able to rest easy tonight because the IRS has an initiative that can settle your tax debt for less than the full amount. The Offer in Compromise is a solution that can help taxpayers who are unable to pay the total amount that they owe to IRS in the timeframe required, or if doing so would cause the taxpayer severe financial strain. Instead of letting your property become subject to IRS seizure, negotiate your bill down through the Offer in Compromise program.
But to get approved, you have to be qualified, and below are five tips to increase your approval chances.
Know which Forms to File
To file an offer in compromise, you must complete Form 656 (Offer in Compromise), Form 433-A (Collection Information Statement) as well as 433-A Worksheet (Calculation Payment Worksheet).
Have Backup Documents
When you file an offer of compromise, you need to prove that you are unable to pay the full tax debt that you owe to the IRS. Make sure to have documents on hand that present your argument with data and credibility.
Pay Application Fee
To have your offer in compromise processed, you must pay the $186 fee. If you are unable to pay this amount, you can submit a request for a waiver.
File all Required Tax Returns
According to the IRS website, beginning with offer applications received on or after March 27th 2017, the IRS will return any newly filed offer in compromise application if the applicant has not filed all required tax returns. Any application fee included with the offer of compromise will also be returned. Any initial payment required with the returned application will be applied to reduce your balance. This policy does not apply to current year tax returns if there is a valid extension on file.
Use the IRS Online Tool
The IRS offers an online tool to help you access whether you will qualify for an offer in compromise. Read about how to use it here.
Get help with your Offer of Compromise Application Today
The IRS only grants about 25% of all offers in compromise requests that they receive. Make your application stand out with these five tips that can help put together a strong application and increase your approval chances.
While these tips are helpful, putting together an offer of compromise can be a lengthy process. Your best bet may be to partner with a tax firm that has experience submitting these requests with a track record of success. Success Tax Relief has worked with thousands of clients to settle their tax debt for less than the full amount owed. Contact us today and let us help you submit the strongest application possible.