How Brokering an Offer in Compromise Deal Can Settle Tax Debt
For those who have found themselves in an uncomfortable position with the Internal Revenue Service (IRS), meaning in serious tax debt, finding a solution might seem impossible, especially if the amount you owe is substantial—more than your income, even! It’s possible to get this resolved, even if it doesn’t look like it. One of the ways you can do this is by filing an Offer in Compromise.
What is an Offer in Compromise?
An Offer in Compromise is an agreement between you and the IRS to settle upon a sum of money for you to pay that is less than the original amount you owe. In other words, the Offer in Compromise reduces the amount of money you owe to the IRS. With an option like this, one might wonder why more people aren’t filing for this option. That is because one must meet certain requirements in order to be eligible.
How Do You Know if You’re Eligible?
First of all, you need to be current with all of your tax filing and any payments related to them. The IRS is not going to help you with your outstanding debt if you don’t have your existing tax business in order. The IRS highly recommends that you use the Offer in Compromise Pre-Qualifier Tool to determine whether or not you are eligible for such an option.
The Pre-Qualifier Tool will ask questions regarding your basic information, assets, income, and expenses. It also accesses your financial and tax filing status to determine the reduced amount. The final decision will be based on your Offer in Compromise application along with a thorough investigation. Even if this assessment shows that you can afford to pay your full tax balance, you still have the liberty to proceed with the Offer in Compromise application process.
How to Submit an Offer
Just like filling out an annual filing, preparing Offer in Compromise documents provide step-by-step instruction that are offered in the Offer in Compromise Booklet, Form 656-B, downloadable in pdf here. There is a $186 non-refundable application fee to apply. The IRS also states that there is an “initial payment (non-refundable) for each Form 656.”
If You’re Offer is Accepted
Congratulations! However, this does not relieve you of your financial responsibilities. You’ll need to comply with the Offer in Compromise Offer Terms, and understand that any federal tax liens that you might have will not be released until your debt is paid in full.
What to Do if Your Offer is Rejected
If for some reason, your application is rejected, you have the right to appeal it 30 days later using Form 13711, Request for Appeal of Offer in Compromise.
Another option is to hire a reputable tax relief firm that has experience settling tax debts for their clients. Success Tax Relief is a trusted nationwide tax relief firm located in LaPorte, Texas known for its open door policy and 24/7 availability to their clients. We have over 30 years of experience communicating with the IRS on behalf of our clients, successfully settling tax debts by consulting with tax attorneys, CPA’s, tax preparers and other professional tax experts.
Call us today at 877-825-1179 or contact us online for consultation.