Requirements and Guidelines to Qualify for an Offer in Compromise
An offer in compromise lets taxpayers settle tax debt for less than the original amount that is due. While the paperwork for the process can be obtained by the taxpayer who is seeking to apply, it has been recommended to work with a tax expert during the process. There are rules and requirements that need to be met in order for your offer to be approved.
An offer in compromise lets taxpayers make an offer on how much they are willing to pay toward unpaid taxes. The Internal Revenue Service (IRS) will review your completed application and give an approval based on information presented.
Requirements and guidelines include:
- Doubt regarding tax assessed.
- Doubt regarding collect-ability.
- Collecting could cause financial hardship.
You aren't denying that you owe taxes but this would be an opportunity to show that paying the full amount may create a hardship or that it would be unfair. Doubt regarding collect-ability includes proving that it is unlikely the IRS would get the full amount from you.
Taxpayers have the option to complete the process on their own but working with a tax professional will help you review your situation thoroughly and help you understand how your situation will be viewed by the IRS. Tax professionals such as a tax attorney or CPA are familiar with the process and know what the IRS needs in order to approve an offer. A tax expert may also review your situation for eligibility.
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