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What is an Offer in Compromise?

An Offer in Compromise is when the IRS does a detailed analysis of your financial situation and determines that they are better off accepting your settlement offer than wasting the time and money involved in trying to collect the full amount of the tax; which could ultimately be unsuccessful.

This program allows anyone who owes the IRS back taxes to wipe the slate clean if they can come up with a settlement that is acceptable to the IRS.

Offers in Compromise are granted on an individual basis. Someone elses successful (or unsuccessful ) application is not indicative of whether you will be successful.

There are three types of Offer in Compromise. The first is known as Doubt as to Collectability. This means that while you owe the tax you simply are unable to pay the full amount of the debt.

The second type of Offer in Compromise is known as Doubt as to Liability. This means that there is a doubt, even if it’s small, that the amount of money the IRS says you owe is wrong. The doubt may be about whether you actually owe the tax or whether the amount of the tax is correct . If you can show that you are not legally responsible for the tax or that the calculation of the tax is incorrect, you can offer a compromise that accurately reflects the tax you actually owe.

The third Offer in Compromise is known as hardship or equity. It’s a catchall category that many people fall into. You must prove to the IRS that collection of the complete debt would create an economic hardship on you and your family that you may not be able to recover from.

I can’t tell you how Offer in Compromise has helped so many people get their life back!

Len