IRS Offer in Compromise

What if . . .

. . . You received a notice from the IRS that you owed them a lot of money and . . .
. . . Perhaps they are threatening to take your home or garnish your wages. . .
. . . But you cannot come close to paying what they say you owe. . .
. . . You are losing sleep not knowing what to do, but it just seems hopeless. . .
…AND, the IRS is demanding a payment for the entire amount owed!

You are not alone. Thousands of taxpayers are met with a tax bill larger than they can afford to pay. When this happens, an IRS Offer in Compromise may be the best solution to resolve your tax liability. An IRS Offer in Compromise is a program offered by the IRS that provides a way for you to settle your tax debt for less than the full amount owed.

There are several things you should know about the IRS Offer in Compromise program. First of all, you must meet certain qualifications to be eligible for the program. Secondly, the process takes considerable time - approximately 8 to 12 months, and possibly longer for more complicated cases. If you do not qualify or your offer is not accepted, the IRS offers alternatives. However, an Offer in Compromise may save you considerable money while affording you the peace of mind in knowing you met your tax obligations.

The IRS Restructuring Act of 1998 established three IRS Offer in Compromise categories:

Doubt as to Liability. This category is used when there is doubt as to whether you actually owe the taxes assessed by the IRS.
Doubt as to Collectibility. This is used when there is doubt as to whether you can actually pay the full amount of the tax owed within the time period the IRS is allowed to collect on the debt.
Effective tax Administration. In this case, your financial information shows that you have the ability to pay but you can demonstrate that paying the full tax liability will place you in an economic hardship or be unfair.

Filing for an IRS Offer in Compromise involves:

Properly completing and filing Form 656 (Offer in Compromise)
Properly completing and filing Forms 433-A and/or 433-B (Collection Information Statements)

Furthermore, you must meet certain qualifications, namely:

You must not currently be in any bankruptcy proceeding.
All due tax returns must be filed.
If you are a business owner, all required federal tax deposits must be made on-time for the two quarters prior to filing the Offer in Compromise.

When you submit your offer, the offer amount must be equal or greater than the total value of assets, plus future income. That total is considered the "reasonable collection potential" amount, and not simply a percentage of the tax debt - which is why the term "pennies on the dollar" is frowned upon by the IRS.

If you fail to meet any of the qualification requirement, FSI Tax Corp will assess your situation to see if you can be brought into qualifying status. For example, if you failed to file you tax returns for previous years, FSI Tax Corp will help you prepare and file your un-filed tax returns. In fact, there is no way to know how much you really owe until all tax returns are filed and assessed by the IRS and you can not file an IRS Offer in Compromise until you are compliant.

The IRS does not accept the majority of offers filed initially through an IRS Offer in Compromise. The required paperwork and amount of detail is immense and if everything is not in exactly the requested format, the IRS will return your offer without processing it.

However, the IRS is not the problem - the lack of time is the problem. Click here now to speak with a tax professional about your tax resolution options. Our tax professionals will discuss your specific situation as assess the best possible solution for resolving your tax liability with the IRS. Contact us today!

IRS TAX RELIEF

IRS Offer in Compromise

What if . . .