An offer in compromise can be a tempting settlement option for those who are struggling with their tax debt. However, it is important to consider the other options before deciding if you should take this route. The reasons why an offer in compromise might not be right for your situation and what you should do instead may open opportunities for other alternatives to relieve your taxes.
How Offer In Compromise Works
An Offer in Compromise is a proposed settlement with the IRS. It typically involves paying off your tax debt for less than what you owe, but without filing for bankruptcy. The IRS will take into account factors like income and expenses when they determine whether or not to accept an offer from you.
You may also be able to combine the offer of compromise with other repayment options such as an Installment Agreement or Payment Plan
Even if it seems that the government is offering a great deal, make sure that this option is best for you before taking them up on their offer!
There might be something else out there that would work better for your financial situation. The IRS will take into account a variety of factors, including your ability to pay, income, expenses, and asset equity.
You’re Not Eligible
In order to enroll in the Offer In Compromise program, you’ll first have to qualify.
Taxpayers in seek of utilizing this program may qualify if:
You’re in compliance with filing and payment requirements (you’ve filed all needed tax returns and have adequate withholding and/or anticipated tax payments to avoid owing money in future tax years)
You are eligible for an OIC if you are unable to pay your taxes with your assets or potential income before the statute of limitations to collect expires.
You can pay the IRS a calculated offer amount equal to your reasonable collection potential (based on an IRS formula), and you can stay in compliance for the next five tax years.
It’s common knowledge that if you don’t even qualify, don’t bother. If you don’t qualify for an Offer In Compromise, there are still plenty of other of fish in the sea. And by fish, we mean other tax relief programs.
IRS Fresh Start Program
There’s no reason to lose in seeking tax relief even if you don’t seem to qualify for the OIC program. There are many tax relief programs that will suit any situation you may have with the IRS. With so many programs out there you may not know where to start.
There’s a relief program that consolidates many major relief programs into a one-size-fits-all assistance program; The IRS Fresh Start Program. Our clients are referred to our Fresh Start Program in order to avoid bankruptcy, acquire debt relief, and settle their debts in a quick manner. Let us give you a helping hand today!
How Simple Is Qualifying?
Considering that the Fresh Start Program is a federal program, you would think meeting the qualifications may be very difficult, but really, it’s a lot simpler and quicker than you think. Take the following steps in order to find out if you are eligible in as little as 3 minutes.
- Fill out some basic information about yourself and your back taxes here.
- Have a representative reach out to you to discuss your eligibility.
- Go through the enrollment process and finally reduce or eliminate your tax liabilities.