offer in compromise

How Do You Qualify For An IRS Offer In Compromise?

Tax Attorney

An Offer in Compromise (OIC) is an IRS agreement that settles your total tax repayment at a lower cost.  

The Offer in Compromise program is designed for taxpayers who are unable to pay their full tax liability, and it offers a way to resolve the debt for less than the full amount owed. 

If you have questions about an Offer in Compromise or need help with your tax-related matters, be sure to contact the Law Offices of Mary King for a consultation. 

In the meantime, here are some of the criteria that the IRS will consider when evaluating an Offer in Compromise.  

How to Qualify

The Offer in Compromise program is available to taxpayers who are unable to pay their full tax liability. To qualify, you must: 

1. Prove that paying your full tax liability would create an undue hardship.
2. Have filed all required tax returns.
3. Have made the necessary current year estimated tax payments.
4. Have made required current quarter federal tax deposits, if you own a business with employees.
5. Not currently be in an open bankruptcy proceeding. 

If you think you might qualify for an Offer in Compromise, the first step is to submit a completed Offer in Compromise Pre-Qualifier tool to the IRS. 

This tool will help you determine whether you meet the basic criteria for an Offer in Compromise. 

What to Expect

If your Offer in Compromise is accepted, you will be required to pay the agreed-upon amount in a lump sum or through a payment plan. 

If your Offer in Compromise is rejected, you will be given the opportunity to appeal the decision or try again with a new Offer. 

You will also be responsible for paying any interest and penalties that have accrued on your tax debt

If you are considering an Offer in Compromise, it is important to consult with an experienced tax attorney to discuss your options and ensure that you are taking the best course of action for your particular situation.  

The tax attorneys at the Law Offices of Mary King have experience representing taxpayers in Offer in Compromise negotiations and can help you navigate the Offer in Compromise process. 

Calculating Your Offer Amount 

There are two Offer in Compromise calculation methods: the Doubt as to Collectability method and the Ability to Pay method.  

The method used will depend on your particular circumstances. 

Doubt as to Collectability

If you cannot pay your full tax liability and meet the criteria for an Offer in Compromise, you may be eligible to have your debt reduced by the IRS. 

Ability to Pay

If you can pay your full tax liability but do not have the ability to do so, you may be eligible for an Offer in Compromise. 

Offer in Compromise Process

If you are considering an Offer in Compromise, it is important to consult with an experienced tax attorney to discuss your options and ensure that you are taking the best course of action for your particular situation. 

The Offer in Compromise process can be complex, and the IRS will not accept every Offer that is submitted. 

An experienced tax attorney can help you navigate the Offer in Compromise process and increase your chances of having your Offer accepted. 

Other Payment Options

You might be wondering what happens if your Offer gets rejected. Then what? 

If your Offer in Compromise is rejected, you will be given the opportunity to appeal the decision or try again with a new Offer. 

You will also be responsible for paying any interest and penalties that have accrued on your tax debt. 

If you are struggling to pay your taxes, there are other options available to you. 

You might be able to set up a payment plan with the IRS or apply for an IRS hardship. 

For most taxpayers, a payment plan is the best option. 

If you are having trouble making your payments, you can contact the IRS to discuss your options. 

The IRS offers a variety of payment plans, and they can work with you to find a plan that fits your budget. 

But keep in mind that any interest and penalties that have accrued on your tax debt will still need to be paid. What’s more, those fees will continue to add up until you’ve paid off your debt in full.

As such, it’s generally in your best interest to pay off your tax debt as soon as possible. In some cases, it might make more sense to apply for a small loan to help pay off your debt.

Many taxpayers find that it’s cheaper to take out a loan and pay off their debt than it is to enter into a payment plan with the IRS. 

Of course, you’ll need to make sure you can afford the monthly loan payments before taking out a loan. 

Let the Law Offices of Mary King Help with Your Tax Matters

The Offer in Compromise program is one way that the IRS may be able to help you if you are struggling to pay your taxes. We invite you to call the Law Offices of Mary King to learn more about this program and see if it may be right for you. 

Phone: 941-906-7585
Online: Contact form

The information in this blog post is for reference only and not legal advice. As such, you should not decide whether to contact a lawyer based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.

Previous Post
What Is The Difference Between Tax Consultant And Tax Lawyer?
Next Post
How Can I Lower My Property Taxes In Florida?

Related Posts

Menu