Who qualifies for an Offer in Compromise

Not everyone qualifies for an Offer in Compromise. Contact us now (800) 632-1750 to discuss your IRS Tax Debt Settlement options

The types of people who will benefit from an Offer in Compromise are people with little or no assets and little or no monthly disposable income.  The best case scenario would be for you to have zero equity in your home in addition to having more monthly expenses than income.  In a situation like that, there is a possibility that your offer to the IRS may be zero.  If you truly do not have the ability to pay them according to the monthly expense allotment given to you by law, then you may be in a non collectible status.  If you are in a position where you can borrow a small amount of money from a friend or family member and we are able to show that the money came from an outside source, there is a good chance that the IRS will accept the offer.

Many people are in a position where they used to earn a lot of money and they didn’t file their taxes or couldn’t afford to pay their taxes.  At this time, they make a significant amount less and can no longer afford to pay the IRS what they want.  Well, if you got hit badly in the Real Estate market like most people did, you probably do not have much equity in your home.  If you don’t make a large amount of money anymore then you probably have little if any money left over after you pay your bills.  You may only have a few hundred dollars per month left over according to the national standards set by the government, and the IRS can’t legally take more than that from you once you have responded to them and furnished the requested documentation from you. 

Offer in Compromise Preparation

We work with you to prepare these financial statements for you, get your account in order and submit an offer of some sort to the IRS.  If you have a few hundred in disposable monthly income that is what your payment plan will be.  If you owe a large debt and want to get rid of it for a small percentage of what you owe, we can submit the Offer in Compromise.

If you have 200.00 in disposable income and no assets, the offer would be 200.00 times 48 months which is 9,600.00.  You would either pay it all at once or if you are in a hardship position, you can pay 20% of that up front ($1,920.00) to the IRS which is required for them to even consider the offer and you would take care of the balance in 5 equal payments over a period of 5 months which would come out to be $1,920.00 per month.  If that is still too high of an amount, the IRS can spread it out over a 24 month period which is a Short Term Periodic Payment Offer. The calculation for this would be the disposable monthly income of 200.00 times 60 months which is a total of $12,000.00. 

The IRS requires you to submit your first of 24 payments at the time your Offer in Compromise is submitted to them.  This would allow you to make 24 equal payments of 500.00 per month to settle your tax liability. They require you to make the monthly payment during the investigation period and failure to do so will cause the offer to be withdrawn from consideration.  For more information, please contact our team of Enrolled Agents, CPA’s, accountants & tax resolution specialists have the knowledge and experience necessary to help you through this time and provide you with proper representation when dealing with the IRS.