Close

Tax News

Does Offer in Compromise really work?

Share this article...
Does Offer in Compromise really work?

Ask the Taxman: Does Offer in Compromise really work?

Question: I’ve heard the advertisements “settling for pennies on the dollar”, is this really possible?  I currently owe $185,000 in back taxes. Would I qualify for an Offer In Compromise?

Answer:  To answer this question about whether you qualify for an Offer in Compromise, we would need to perform a financial analysis. Yes, it is possible to substantially reduce your debt through an Offer In Compromise, however, the potential amount or if you qualify would be determined by analyzing your financial situation.  Generally speaking, if your tax debt is so large that you cannot pay it off within the remaining statute of limitations; given your “reasonable collection potential”, you will most likely qualify.

The IRS has learned that aggressive tax collections with someone that cannot afford to pay is not very fruitful.  If the IRS can determine that they could not possibly collect the full debt, given their vast resources, they will entertain the idea of a settlement.  This is in no way easy and you can imagine the IRS is going to fight you all the way.

Here’s how it works in our firm: 1) First we analysis the previous debt to make sure no mistakes were made or there are not any opportunities to reduce the debt. 2) We gather financial information from you to prepare the Offer In Compromise looking for opportunities to lower the settlement amount, 3) Once we have gathered all the financial information and the supporting documentation, we will present the IRS with an offer.  4) Sometimes the offer examiner will accept the offer; other times he/she will counter. Often the Offer Examiner will deny the offer for no apparent reason or one that is unreasonable.  This is when the case must be appealed.  You have a limited amount of time to appeal.  A vast number of our cases are won in appeals, unfortunately few taxpayers know how to appeal or that it exists.  If accepted you will find  that your IRS debt has been reduced substantially. I need to emphasize that it is critical that you work with a Certified Tax Resolution Specialist during this process. Negotiating with the IRS is complicated and they certainly do not make it easy.

We deal with Offers in Compromise daily. That’s our job.  We are the. Rescue Squad for Troubled and Overtaxed Taxpayers.  For a complimentary, no-risk consultation, call our office at 800-829-7483.

How Does the Collection Statute Expiration Date (CSED) Affect You?

IRS Announces New Mileage Rates For 2016 and They Are DOWN From 2015.

PDF
Printable PDF

Have a Question About This Topic?

I confirm this is a service inquiry and not an advertising message or solicitation. By clicking “Submit”, I acknowledge and agree to the creation of an account and to the Terms of Use and Privacy Policy.

NEVER MISS A STORY.

Sign up for our newsletters and get our articles delivered right to your inbox.

 

Track Your Refund

 
Track Federal Refund Check Federal Amended Return Refund

Check your State Refund

Client Login

 

Refer a Friend

.