Take This Quiz to Find Out if an Offer in Compromise Is a Smart Decision for Your IRS Debt

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Take This Quiz to Find Out if an Offer in Compromise Is a Smart Decision for Your IRS Debt

The IRS offer in compromise (OIC) can be a great solution for dealing with large amounts of tax debt — but it’s definitely not for everyone. Unfortunately, determining who, exactly, is a good fit can be tough.

The IRS offers a pre-qualifier tool, but this can be time-consuming to use. For immediate insight into your prospects, complete this simple offer in compromise quiz:

Are you currently dealing with bankruptcy proceedings?

If the answer is yes, you, unfortunately, cannot obtain an offer in compromise at this time.

Are you current on tax filings and estimated payments?

All relevant tax returns must be filed before you can apply. Likewise, you’ll need to be current on estimated payments. If not, seeking an OIC is a waste of time.

Are you convinced that you don’t owe the supposed tax debt in the first place?

You may be eligible for an offer in compromise based on a doubt as to liability. This type of OIC is complicated, however, so you’ll want outside assistance from a professional.

Does your tax debt exceed the reasonable collection potential?

The IRS relies on the reasonable collection potential (RCP) to determine eligibility when there is a doubt as to collectability. While the official calculations are complicated, you can get an idea as to your personal RCP by adding the quick sale value of your current assets to your net monthly income. Finally, multiply this figure by 60.

Depending on how complicated your financial situation is, you may be able to come up with a figure quickly. In all likelihood, however, you’re better off getting insight from the pre-qualifier tool — or better yet, a tax professional.

Still not sure if it’s worth your while to seek an offer in compromise? Our team can help you weigh your options. Contact us today to learn more.