The IRS Offer in Compromise
The IRS Offer in compromise is a program that the IRS offers to taxpayers to settle their tax for less than the amount that they owe. It may sound too good to be true but it is actually a legitimate option for taxpayers who qualify for it.
The reason is that the IRS has a statute of limitations to collect on your debts and if the duration expires, they can no longer legally come after you for that tax. So, if you can show that you’re going to pay the debt before the statute of limitations then the IRS is most likely going to settle with you
The first step to see if you qualify for an IRS offer in compromise is to make sure you file all your missing tax returns. This is important for two reasons;
- As stated before, the IRS will be willing to settle because of the statute of limitations and that is a period of 10 years. The 10 years only begins when you have filed your tax returns. If you have not filed your tax returns, then your 10 years have not started counting which gives the IRS more time to collect on you.
- You need to file your taxes to know what you owe and the exact amount.
The second step to qualify for an IRS offer in compromise is to make sure you’re paying the accurate amount of taxes moving forward from this point on. We will try to settle your back taxes but the IRS will not be willing to settle if you continue this action of owing taxes.
The next step is to see how much you own in assets and the reason being is that if you own assets worth more than what you owe the IRS, the IRS will simply not agree to your appeal.
How much will the IRS settle for
The IRS uses a very specific formula in determining the settlement value of an offer in compromise and how much to settle for in an offer in compromise. Your success is determined by how well you fit into the IRS formula. There have been cases of people who owed over a million and the IRS settled for just a hundred thousand, and there have been cases where the individual owed about two hundred thousand and the IRS settled for one thousand.
There is no specific amount that the IRS has stipulated for tax debt settlement during an offer in compromise. It all depends on your unique situation. Success in an offer in compromise is based on a full understanding of the IRS investigative processes into your income, living expenses, and assets.
This is why you should hire a professional company when applying for an offer in compromise. Companies who are professionals in tax settlement issues like tax reduction and offer in compromises can help you. Call us today at 888-585-8629 for immediate assistance.
It is never a one size fits all situation. The amount of one person’s settlement has no bearing on the success of another taxpayer. The IRS has no set percentage of settlement to the amount owed. It all depends on convincing the IRS that your financial situation is very bad. If you owe the IRS and can not afford to pay then you need to be calling us as soon as possible.
About us
We are a tax relief firm dedicated to giving you the best results regarding resolving your tax debts. Our team of qualified professionals is available round the clock to provide you with the assistance you need. Contact us now at 888-585-8629 or 617-430-4674 or send us an email at help@newstarttaxconsulting.com.
For more information, email info@newstarttaxconsulting.com
