THe Offer in Compromise Program

The beginning of new year is a good time to look at the Offer in Compromise program.  Many times the IRS is willing to settle for less than the full amount owed. However, this depends on your particular circumstances.  Therefore each case is unique.  The process is called an Offer In Compromise.  It is

 

 

available only to those taxpayers who are current in filing all of their tax returns, so if you have unfiled returns, you must first file those returns before submitting the Offer.  The basic criteria for an Offer is that the taxpayer does not have the present ability to pay the tax and will most likely not have the ability to pay the tax over the remaining life of the statute of limitations for the tax. The statute of limitations to collect a tax is 10 years.  However, this time does not start until after the tax return is filed with the IRS.  If the taxpayer meets these criteria, he or she is a good candidate for an Offer. This is called an Offer based on “doubt as to collectability.”  There are two other types of Offers called “doubt as to liability” and “effective tax administration.”  Space does not permit explanation of those but many people who do not qualify for the first type do qualify for the others.