Question: I owe a lot of money to the IRS, and having just filed my taxes for 2012, I owe even more! I need to do something, and soon. How do I know if I qualify for the Offer in Compromise program?
Answer: The Offer in Compromise is a great program for consumers who owe a substantial amount to the IRS but who cannot pay off their tax debt, even if given time. There are many reasons taxpayers find themselves in such a situation — medical problems, career change, poor financial decisions, etc.
No matter the reason, the Offer in Compromise can provide a great way to settle your tax debt once and for all, assuming you qualify for the program. Now, when I talk about the Offer in Compromise, I think it helps to explain the context and why the IRS allows consumers to submit compromise offers.
For years, the IRS was known for its aggressive, maybe even call it “bare-knuckled,” approach to tax collection. But the tax-collecting agency soon realized that knocking on doors to collect taxes wasn’t as effective as being flexible. Enter the Offer in Compromise.
For taxpayers who qualify — and you must show that you lack the earnings and assets to pay off your tax debt, even over time — the Offer in Compromise allows consumers to negotiate a settlement offer that eliminates their tax debt once and for all. A successful Offer in Compromise can reduce your tax debt by a significant amount.
It’s impossible to tell if you qualify for the program based on the information you provided alone. So your first step should be to consult a qualified tax professional who will analyze your previous returns with a fine-toothed comb, determine exactly how much money you owe, and then take your case to the IRS and negotiate on your behalf for the Offer in Compromise.
At Tax Resolution Services, we are IRS problem solvers. For a free, no-risk consultation, please call our office at (888) 699-7630.
More Tax Help, IRS News and Tax Relief Tips:
- Settle Tax Debt with the IRS Offer in Compromise Program
- Pay Off Tax Debt with Offer in Compromise or Installment Agreement?
- Ask the Tax Resolution Expert: The IRS Offer in Compromise or Installment Agreement Programs May Be Your Tax Debt Solution
- IRS Offer in Compromise Tax Settlement Program: What You Need to Know
- IRS Question Corner: How Do I Get Tax Relief?