5 Things to Remember When Filing an IRS Offer in Compromise

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Individuals and businesses alike come to us wanting to settle with the IRS via the Offer in Compromise method. A lot goes into filing for an IRS Offer in Compromise and even more goes into the planning prior to initiating the filing. We typically look at the 5 items below prior to filing for an IRS Offer in Compromise:

  • Is the taxpayer current and compliant with tax payments? Prior to filing for an IRS Offer in Compromise the taxpayer must be current with estimated payments
  • Is the taxpayer current with all filings? Prior to filing for an IRS Offer in Compromise the taxpayer must be current and compliant with all filings
  • Will the taxpayer be able to fund the IRS Offer in Compromise? We need to analyze whether or not the taxpayer can pay the IRS Offer in Compromise figure we arrive at
  • Will the taxpayer be able to stay current for the 5 years following acceptance of the IRS Offer in Compromise? There is a 5 year rule whereby the taxpayer must file and pay all taxes timely after acceptance of the IRS Offer in Compromise
  • Does the taxpayer qualify for the IRS Offer in Compromise process? It may sound simple to point the fact out but the taxpayer must show he/she doesn’t have the ability to pay. Unfortunately the IRS will not consider an arbitrary figure or a lump sum settlement offer if the client shows the ability to pay their debt in full, on a payment plan, or over the lifetime of the collection statutes

If you or someone you know is considering the IRS Offer in Compromise process as an option please reach out. We have extensive experience regarding the IRS Offer in Compromise process and will be able to guide you or anyone you know in the right direction.