IRS Offer In Compromise

The IRS Offer In Comprise program allows you to settle your tax debt for less than the full amount you owe—if you are eligible.

Make Sure You Are Eligible

Before the IRS can consider your offer, you must be current with all filing and payments requirements. You are not eligible if you are in an open bankruptcy proceeding. You can use the IRS Offer In Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.

The IRS will generally approve an offer in compromise when the amount offered represents the most the IRS can expect to collect within a reasonable period of time.

The IRS considers each taxpayers unique set of facts and circumstances such as:

·Ability to pay

·Income

·Expenses, and

·Asset equity

 

IRS Form 656-B contains the step-by-step instructions and all the forms and information required for submitting an offer in compromise.

Note that the IRS will return any newly filed Offer In Compromise Application where the taxpayer has not filed all required tax returns. This policy does not apply to current year tax returns if there is a valid extension to file.

Currently the application fee is $186.00 and is non-refundable. You will also need to make an initial payment (non-refundable) with each Form 656.

BEWARE:

Television ads suggesting you can settle for “pennies on the dollar” may be misleading. Always seek competent professionals you can trust before considering an offer in compromise.

 

This article was written by Donald M. Scherzi, CPA, CFP, LLC
Mike Lupo, SCORE Counselor
Visit us at: www.scoresouthflorida.net