Can I Really Settle Back Taxes with the IRS Offer in Compromise Program or is it a Scam?

With the economy being low, tax scams are abundant these days.  When I came across this question from a taxpayer, I thought it was important to address this.  Many people are confused about why the IRS Offer in Compromise program was created and my answer below should satisfy you.

Question: I’ve read some of what you’ve said about the Offer in Compromise program. To be honest, I find it hard to believe. There are so many scams out there. I owe a good deal of money in back taxes, and I don’t know how I’ll pay it off. But why would the IRS agree to accept less than I owe?

Answer:  Your skepticism is healthy. Indeed, there are a lot of scams out there today — many of them preying on people in tax trouble — and so you are wise to take a skeptical approach at first.

But I — and every other qualified tax professional out there — can assure you that the Offer in Compromise is not a scam. To understand why the IRS might be willing to accept less than you owe as part of a compromise offer, it’s important to understand the IRS’s position and mentality: Prior to use of the Offer in Compromise, the IRS often took a tough-as-nails approach with indebted taxpayers — knocking on doors, chasing taxpayers across the country, trying everything to collect what was owed.

During this period, the IRS began to realize that a gentler approach could actually be more effective. The irony is that the Offer in Compromise in many ways allows the IRS to collect more tax revenue than the more aggressive tactics netted. That’s exactly why the tax-collecting agency might be willing to accept less than you owe as part of a compromise offer.

Now, if you’re interested in filing an Offer in Compromise, the first thing you should do is consult a qualified tax professional. He or she will analyze your previous returns, establish the exact amount of your tax debt, and chart a course of action. Of course, you need to make sure you qualify for the Offer in Compromise program, and this is where you’re qualified tax professional can help. However, if you do not qualify, you may have other good options, such as the Installment Agreement.

I handle Offers in Compromise every day, because I’m an IRS problem solver. If you are interested in exploring the Offer in Compromise program to settle your back taxes, contact Tax Resolution Services at 1-866-IRS-PROBLEMS (1-866-477-7762) for a free, no-risk, tax consultation today.

More Tax Help, IRS News and Tax Relief Tips:

  1. Ask The Tax Resolution Expert – Is the IRS Offer in Compromise Program or IRS Payment Plan for me?
  2. Offer in Compromise Program or an IRS Payment Plan? Get Your Tax Debt Questions Answered Here!
  3. Can I Settle Back Taxes with an Offer In Compromise or an IRS Installment Agreement?
  4. Owe IRS Back Taxes? The Offer in Compromise or Installment Agreement are Options for Tax Relief
  5. Tax Expert Educates About Offer in Compromise and IRS Installment Agreement Plans

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2 Responses to “Can I Really Settle Back Taxes with the IRS Offer in Compromise Program or is it a Scam?”

  1. James Says:

    What about 941 penalties and interest?

    I’ve been in an installment agreement with the IRS since 2008 on unpaid 941’s. Currently my balance is about 11k ALL of which is penalties and interest. They put a lien on my personal SSN and confiscated over 14k and I’ve paid over 20k in payments for a total of 34k. The original amount owed was 34k so the current 11k is 100% penalties and interest.

    s an OIC something I can do?

  2. TRS Says:

    Hi James,

    Thank you for your comment. A member of our team will be in touch shortly to discuss how we could help, but in the meantime please check out our payroll tax problems page for more information:


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