Ask the Tax Resolution Expert – Which is Better: Installment Agreement or Offer in Compromise?

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I’ve read a little bit about the Offer in Compromise and the Installment Agreement. Which one is better?

Answer:  The question here shouldn’t be: “Which one is better?” It should be: “Which one is better for you?”

Ultimately, you’ll want to get the answer to that question from a qualified tax professional. But let me explain the differences to give you a better idea which one might be the best for you in your current situation.

Some quick background: After years of chasing deadbeat taxpayers with bare-knuckled tactics, the IRS discovered that a gentler, more flexible approach can actually increase the government’s collection efforts. In that spirit, the IRS introduced the Offer in Compromise and the Installment Agreement. They are both powerful, but vastly different, options for taxpayers.

The Offer in Compromise is intended for taxpayers who, for whatever reason, find themselves with substantial tax debt and an inability to pay that debt, even over time. This situation can occur in a variety ways — due to business failure, legal liability, medical problems, etc. No matter what the reason, the Offer in Compromise allows taxpayers who quality to settle their entire debt amount with the IRS for less than they owe..

The Install Agreement, which is a payment plan to the IRS, by contrast, is for taxpayers who are currently unable to pay their current tax debt — but who can pay that tax debt over time. With an Installment Agreement, the taxpayer makes monthly payments toward the debt that will not drastically alter the taxpayer’s lifestyle but which, over time, will pay down and eliminate the debt.
If you have tax problems and believe either of these programs may benefit you, consult a qualified tax professional. I deal with these types of tax problems every day. That’s because I’m an IRS Problem Solver. For a free, no-risk consultation, please call my office at 818-774-1813 or toll-free at 1866-IRS-PROBLEMS.

More Tax Help, IRS News and Tax Relief Tips:

  1. Ask the Tax Resolution Expert – Do I Qualify for the IRS Offer in Compromise Plan or Participating in the IRS Installment Agreement Payment Plan?
  2. Ask The Tax Resolution Expert – Is the IRS Offer in Compromise Program or IRS Payment Plan for me?
  3. Ask the Tax Resolution Expert – Qualifying for the IRS Offer In Compromise Program for Taxes Owed
  4. Offer in Compromise Program or an IRS Payment Plan? Get Your Tax Debt Questions Answered Here!
  5. Certified Tax Resolution Specialist Michael Rozbruch Has a Special Message for You!

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One Response to “Ask the Tax Resolution Expert – Which is Better: Installment Agreement or Offer in Compromise?”

  1. Larry Says:

    I used to live and work in US and filed tax return every year until I left in 2005. I didn’t file since 2006 as I am not a PR or citizen, but maintained a brokerage/bank account and continued trading stocks. As a non-resident alien, do I need to file tax return for that. The capital gains were less than $8K.

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