If you’re burdened with overwhelming tax debts, an IRS offer in compromise (OIC) can provide a potential lifeline. Attorney Robert Schaller explains what an offer in compromise is, who qualifies, and outlines the step-by-step process to negotiate a reduced settlement with the Internal Revenue Service.

Benefits of IRS Offer in Compromise

1. Reduced Debt: An approved offer in compromise allows you to settle your tax debts for less than the total amount owed, potentially reducing your financial burden significantly.
2. Fresh Start: Upon acceptance and fulfillment of the terms, the IRS releases any tax liens against you, providing a fresh start and the opportunity to rebuild your financial standing.
3. Avoiding Collection Actions: An offer in compromise prevents the IRS from taking aggressive collection actions, such as wage garnishment or bank levies.

Understanding IRS Offer in Compromise

An IRS offer in compromise is a program that allows taxpayers to settle their tax debts for less than the full amount owed. It provides a legitimate opportunity for individuals and businesses to find financial relief by making an affordable lump sum or installment payment.

Eligibility for IRS Offer in Compromise

To be eligible for an IRS offer in compromise, you must:

1. Be current with all filing and payment requirements.
2. Demonstrate inability to pay the tax debt in full.
3. Provide complete and accurate financial information to support your offer.

The Process of Securing an IRS Offer in Compromise

Attorney Robert Schaller can provide valuable help securing an offer in compromise by:

1. Evaluating Your Qualifications: Assess your financial situation, considering your income, expenses, assets, and future earning potential. Determine if pursuing an offer in compromise is the most viable option for you.
2. Submitting the Application: Complete and submit Form 656, Offer in Compromise, along with the required documentation and the non-refundable application fee (unless eligible for a waiver).
3. Preparing the Financial Disclosures: Provide comprehensive financial information, including income, expenses, assets, and liabilities. This information will help the IRS assess your ability to pay the tax debt.
4. Negotiating with the IRS: The IRS will review your offer and may request additional documentation or clarification. Be prepared to negotiate and support your proposed settlement amount based on your financial situation.
5. Explaining Acceptance and Payment: If the IRS accepts your offer in compromise, you have two payment options: a lump sum payment or installment payments. Fulfill the agreed-upon terms within the specified timeframe.

An IRS offer in compromise can be a lifeline for individuals and businesses struggling with overwhelming tax debts. By understanding the eligibility requirements, benefits, and the step-by-step process to secure an offer in compromise, you can potentially negotiate a reduced settlement and find financial relief. Take control of your tax debts today with an IRS offer in compromise.