Financial struggle is the name of the game during the COVID crisis. Even if you managed to qualify for a PPP loan or take advantage of the stimulus, you’re likely feeling stressed as yet another round of tax obligations arrives. In the midst of all this, tax debt could put you over the edge.
If there’s ever been a time to take advantage of IRS resources, this is it. The offer in compromise (OIC), for example, could help you settle your debt for far less than you currently owe.
Considerations for Pursuing an Offer in Compromise During COVID
While an IRS OIC could provide much-needed relief during this difficult time, there’s no guarantee that your offer will be accepted. Even if it is, you could face a variety of stressful tax concerns as you await a response from the IRS. Delays, for example, are likely as the agency deals with a huge backlog.
If you are eventually accepted, you will enjoy a unique advantage afforded by the IRS response to the pandemic: greater flexibility than would ordinarily be offered in the event of payment issues. Recently, authorities at the IRS have expressed a willingness to ease up on those who cannot handle the terms of accepted OICs.
Watch Out for Offer in Compromise Scams
As you weigh your options, keep an eye out for OIC scams. If tax debt arrangements seem too good to be true during a pandemic, they probably are.
Unfortunately, OIC scams have landed a spot on the IRS Dirty Dozen for 2020, indicating that they are becoming a more common problem. While third-party representation can be helpful, you’ll want to take greater care to ensure that you hire a reputable provider.
As you weigh the pros and cons of the IRS offer in compromise, feel free to seek insight from the experts at the Highland Tax Group. We can help you every step of the way, so reach out to get started.