An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship. The IRS considers your unique set of facts and circumstances including:
- Ability to pay;
- Expenses; and
- Asset equity.
The IRS generally approves an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time. You should explore all other payment options before submitting an offer in compromise. The Offer in Compromise program is not for everyone. If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.
Before the IRS will consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding.
For more information on an offer in compromise, call us at 813-514-2920.