Know Your Taxes: Offer In Compromise
Updated: Nov 3, 2021
Offer in Compromise is a way for taxpayers to settle their tax debt without going through the whole process of bankruptcy. It is offered as an alternative to filing for bankruptcy and gives you time to get back on your feet financially. An Offer in Compromise means that the IRS will take less than what they are owed from you, but it doesn't mean that they won't collect anything at all. In this blog post, we'll talk about how much does offer in compromise cost and who qualifies for one!
How Officer In Compromise Works
An Offer in Compromise is a proposed settlement with the IRS. It typically involves paying off your tax debt for less than what you owe, but without filing for bankruptcy. The IRS will take into account factors like income and expenses when they determining whether or not to accept an offer from you. You may also be able to combine the offer of compromise with other repayment options such as Installment Agreement or Payment Plan
Even if it seems that the government are offering a great deal, make sure that this option is best for you before taking them up on their offer! There might be something else out there that would work better for your financial situation. The IRS will take into account a variety of factors, including your ability to pay, income, expenses, and asset equity.
Taxpayers in seek of utilizing this program may qualify if:
You're in compliance with filing and payment requirements (you've filed all needed tax returns and have adequate withholding and/or anticipated tax payments to avoid owing money in future tax years)
You are eligible for an OIC if you are unable to pay your taxes with your assets or potential income before the statute of limitations to collect expires.
You can pay the IRS a calculated offer amount equal to your reasonable collection potential (based on an IRS formula), and you can stay in compliance for the next five tax years.
IRS Fresh Start Program
The Offer In Compromise program is also happens to be one of the four major components in the IRS Fresh Start Program. There are many programs that are offered in order to solve your tax-related issues in some sort of way. But there is a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program; The IRS Fresh Start Program.
This program is designed to relieve not only the IRS, but also your back taxes. It does this by making sure you are filing accurately and gives up-front payment options solutions for those who can't afford their tax debt payments. This relief program utilizes four of the major tax resolution strategies into one consolidated program!
See if you qualify for the Fresh Start Program today!
Resolve your tax debt before the IRS surprises you with late fees and penalties!
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