How do you qualify for Offer In Compromise?
A program offered by the IRS to taxpayers who are unable to pay their tax debt. Those who qualify are allowed to make an offer in compromise, which is an offer to pay a lesser amount than that which is owed. The offer in compromise program is intended to allow taxpayers with substantial back taxes to settle their tax debt and start over with a clean slate, so that they can remain current on their taxes in the future.
Here is what you need to qualify:
1) Uncertain Liability – Is tax really owed?
2) Uncertain Collectability – Taxpayer has no way to pay this debt.
3) Economic Hardship – Taxpayer must prove that paying the debt would be unfair or create further hardship.
Depending on the situation, an Offer In Compromise may used to correct inaccuracies in the tax filings. It may also be used to show that you cannot make the necessary payment to restore your account. In this situation, you may qualify to pay much less due to the uncollectibility of your account.
When properly prepared, the Offer In Compromise will give you a chance to settle all taxes and penalties and give you fresh start without any harassment from the IRS.