Understanding the IRS Tool to See If You Pre-Qualify For an Offer in Compromise

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If you’re desperate for tax relief, you’ve likely pondered the idea of pursuing an offer in compromise. This option could help you settle for less than you owe.

Unfortunately, it takes considerable time and effort to qualify for an OIC. Don’t give up just yet. The IRS offers a helpful option to give you a better idea of your prospects. Keep reading to learn more about this pre-qualification process.

What Is the IRS Pre-Qualifier? How Does it Work?

The IRS provides an online tool to help you determine OIC eligibility. The pre-qualifier consists of a series of questions designed to highlight concerns that might prevent you from receiving an OIC. Issues explored through these queries include:

  • Total tax debt, penalties, and interest
  • Filing for federal tax returns
  • Self-employment concerns, including estimated payments and federal tax deposits
  • Assets, including bank balances, home market value, retirement account equity, etc.
  • Income, including wages, dividends, child support, net business income, etc.
  • Expenses, including rent or mortgage payments, vehicle loans, health insurance premiums, etc.

What If I Don’t Like the Results?

If you don’t like the proposal you receive after completing the pre-qualifier, keep in mind that these results are not set in stone. The purpose of this tool is only to provide an overview of the application process and related eligibility standards.

Unfortunately, it’s possible to pass the pre-qualifier with flying colors and still be rejected for an OIC. On the flip side, undesirable results at the pre-qualification stage shouldn’t necessarily prevent you from applying. They should, however, alert you to concerns worth addressing before you complete your application.

The IRS OIC pre-qualifier may be helpful, but you’ll benefit most from the assistance of a tax resolution provider such as the Highland Tax Group. Reach out today to learn how we can help.