How Can My Offer in Compromise Be Approved?

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There can be various outcomes when taxpayers become delinquent in paying the IRS their money due. Each case will consider different factors to resolve it as quickly and fairly as possible for everyone involved in that case. When considering any outcome of an offer in a compromise application the following criteria must be taken into consideration by the IRS:

IRS employees often propose Offer in Compromise agreements as an avenue of relief to delinquent taxpayers who owe back taxes, though not always as the final choice. Certain requirements must first be fulfilled for consideration of such programs by IRS employees who handle your case – they’ll know whether the circumstances warrant such an offer of compromise agreement or not.

What Is an Offer in Compromise (OIC)?

The IRS established the program as a solution for taxpayers owing unpaid taxes to them, where both parties agree that reaching an arrangement that allows the taxpayer to pay less than his/her current due taxes is in their best interests. Information used by the IRS when making this determination includes Form 656 which serves as the source for its final disposition. While their monthly payment has already been established as per this offer in the Compromise agreement terms and approval have already been set by them alone.

Program Requirements for Offering Commission

Three unique requirements must be fulfilled for an offer of compromise to be approved by the IRS. They will carefully consider all information on Form 656 before considering options based on the following criteria:

Uncertainty About Liability: It’s not necessary that taxpayers can pay all amounts due to them to the IRS; in some instances, they might think they owe less. Depending on circumstances and laws regarding debt repayment arrangements, the settlement could take different paths depending on individual taxpayers.
Doubt About Collectability: The taxpayer must convince an IRS representative of the high probability that they cannot pay the entire debt amount due to income, expenses, and assets issues. They’ll examine everything, including taxpayers’ income reports, to gauge whether the evidence shows they can cover their total tax debt.
Payment would impose significant financial hardship: This criterion allows taxpayers to convince the IRS they must negotiate for a lower amount to help ease their situation and make life less burdensome. After reviewing information contained on Form 656, attached as part of an Offer of Compromise request; or considering strong equity policies or public policies worthy of being part of such negotiations. You can submit an Offer in Compromise request for government representatives to consider as grounds for approval.

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How an Offer in Compromise Can Resolve IRS Tax Debt

Internal Revenue Service (IRS) is responsible for collecting all the taxes due from individuals and companies as per applicable laws. Should any taxpayer fail to make their payment arrangements on time, an investigation will begin by the IRS to collect those arrears owed from them.

To request a reduction or cancellation of tax debt, file an Offer in Compromise along with Form 656 to the Internal Revenue Service. This document helps the IRS evaluate whether you should repay the debt in full or qualify for an installment plan.

Your Compromise Offer may either be accepted and reduced payment plans arranged, or rejected; how you submit it on the form will determine its outcome.

Bottom Line!

An Offer in Compromise (OIC) program developed by the IRS provides taxpayers a chance to settle their tax debt at less than the full amount due. It is available both to individuals and businesses that meet specific eligibility criteria. The IRS analyzes OIC requests using Form 656, which gives details about each taxpayer’s finances. Taxpayers who wish to qualify must fulfill one or more of three conditions to do so either doubt about liability in which they believe their debt to the IRS may be less. Collectability issues where due to limited income or assets they cannot fully pay their obligation; or substantial financial hardship showing full payment would impose undue financial strain.

Once submitted, the IRS reviews your Offer in Compromise application to decide whether they accept it, suggest reduced payment plans, or reject it altogether. It offers one way of clearing away tax debt quickly but meeting criteria and providing accurate documentation are keys to its success.

Unwreck your tax debt today! Don’t allow unpaid taxes to keep you down, connect with an experienced tax professional like Tenina Law to determine eligibility and guide you through this process. Take the first steps toward financial relief by filing Form 656 with the IRS; sooner rather than later will help resolve all of your tax woes!