Ask The Tax Resolution Expert – What is the Offer in Compromise, and how do I qualify?
It’s tax season – the perfect time to resolve your tax probelms and get your IRS questions answered!
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Question: Give it to me straight, please. I have substantial tax debt. What is the Offer in Compromise, and how do I qualify?
Answer: Like you, I’ll get straight to the point: the Offer in Compromise is an IRS program that can reduce your tax debt significantly.
Really.
This is how it works and why it exists: If you owe a substantial amount of tax debt that you cannot, for whatever reason, pay off in the future, you can negotiate with the IRS to accept a settlement offer that will eliminate your debt once and for all. Oftentimes, as I mentioned, this amounts to pennies on the dollar. The reason the IRS offers this program is simple: Following years of chasing down deadbeat taxpayers, the tax-collecting agency learned that a kinder, gentler approach can be a more efficient way of collecting taxes. In the end, the IRS theory goes, the government will collect more of what it’s owed by being flexible with taxpayers willing to come forward and settle their debts.
Now, whether you qualify is ultimately going to be an answer given to you by the person who analyzes your previous returns and current financial situation. For that reason, if you have substantial tax debt, I recommend you consult with a qualified tax professional as soon as possible. He or she will take a look at your current situation and see what program works best for you.
If you do indeed qualify for the Offer in the Compromise, you and your tax professional would set up an appointment with an IRS agent and discuss the terms of your settlement agreement. That’s where you can effectively reduce your debt by a significant amount. However, keep in mind that even if you do not qualify for the Offer in Compromise, you have other options available.
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I deal with tax problems every day and I have blogged about resolving tax problems with the Offer in Compromise program before. That’s because I’m an IRS Problem Solver. For a free, no-risk consultation, please call my office at 866-IRS-PROBLEMS (1-866-477-7762) or visit the Tax Resolution website.
More Tax Help, IRS News and Tax Relief Tips:
- Since the New Year has rolled around, I’ve made myself a promise: I want to get rid of my tax debt. I owe about $140,000 in back taxes and now earn about $65,000 per year (with no savings). I don’t know where to begin. Can you help?
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- Ask the Tax Resolution Expert – Qualifying for the IRS Offer In Compromise Program for Taxes Owed
- Ask the Tax Resolution Expert: What if My IRS Back Taxes Problem Cannot Be Resolved with the Offer in Compromise Option?
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