IRS Offers in Compromise

If you are overwhelmed with federal tax debt it can be hard to know what options are available. An offer in compromise is an option offered by the Internal Revenue Service (IRS) which allows you to settle your tax debt for a fraction of what you still owe.

The IRS reportedly fails to collect over $400 Billion in unpaid taxes each year. Each time they reach an offer in compromise in unpaid back taxes, they reclaim a small amount of this deficit. If, based on the data, it seems unlikely that they will ever collect the full amount owed, they will instead collect as much as they determine they reasonably can expect to get, as it was already a sunk cost.

It’s important to note that the IRS accepts only a small amount of the applications for offers in compromise that it receives. In order to have your request approved, it’s essential that you have a qualified and experienced tax resolution expert on your side to help you navigate the process and present your claim in the strongest possible light.

While the IRS considers the unique financial facts and circumstances of each individual who applies, the decision usually comes down to the likelihood that the IRS will be able to collect what they owe in full from this individual. If there is a genuine conflict as to the amount of taxes still owed, the IRS may choose to settle for a lesser amount, if they don’t think the full amount will hold up, or if it would cost more to litigate it than to settle. Additionally, if an individual’s financial circumstances are such that they cannot repay what they owe in full and that situation is unlikely to change, the IRS will likely settle for a much lower amount (which they have determined is the greatest amount they can expect to collect). An experienced tax resolution professional will advocate zealously on your behalf and fight to get you a compromise that will allow you to get back to living your life.

Even if you have already arranged a payment or installment plan with the IRS, you can still qualify for an offer in compromise if the agreed upon payment is causing you financial hardship. In considering your application, the IRS will evaluate your ability to repay your debt based on your income, expenses, and estimated asset equity. An experienced tax resolution expert will thoroughly assess and evaluate your financial situation in order to present the best possible case for an offer in compromise.

Dealing with the IRS is enough to make most people break out in a cold sweat. Trying to navigate tax problems on your own can feel all consuming. If you are wondering if there is a life beyond tax problems, we’re here to remind you that there is, and it may only be a phone call away. Contact our offices today, serving San Diego County, and all of greater Southern California. If you have a tax issue in California, we can help you solve it. We offer free consultations by phone and online 24 hours a day, 7 days a week. Find out how much better your life can be, tax problem free.