Many people have heard about the IRS’ “Offers in Compromise” program, but it is very misunderstood.
- It is not a give-away program
- Be aware of scam artists promising “guaranteed results” and “pennies-on-the dollar” settlements
- If you have the ability to pay within statute of limitations, IRS will not settle for less
- Ability to pay based on equity in assets plus present value of your monthly ability to pay
- A “rough” OIC determination included free with game plan
Offers based on doubt as to liability
- Used when taxpayer believes amount of tax debt is incorrect
- Example: Statute of limitations has expired on the taxpayer’s ability to file an amended return
- Should be submitted with the assistance of a qualified tax professional
Offers based on doubt as to collectibility
- Used when tax debt is correct but taxpayer is not able to pay
- If you offer more than IRS determines it will ever be able to collect, IRS may be willing to settle
- Any good representative can make a rough estimate at your initial meeting; don’t pay thousands of dollars in fees to someone without that determination made up front
- Tax Problem Solver, Inc. can review your OIC paperwork before you pay someone
CAUTION: Filing an offer in compromise extends the statute of limitations on collections if not accepted. Further, if your offer is accepted, you will be on a 5-year probationary period.
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