In our opinion, the Offer in Compromise program is one of the best tax resolution tools available to taxpayers. The Offer in Compromise program allows taxpayers to settle their taxes for less–or often much less–than owed (or than what the government claims is owed). Recent tax legislation has given new hope to taxpayers who were disqualified by the old Offer in Compromise procedures.
We have extensive expertise with planning, preparing, negotiating and even appealing rejections of Offers in Compromise. Since 1997, we have saved millions of dollars for our clients through the Offer in Compromise program.
We get our edge by knowing and carefully navigating virtually every key regulation of the Offer in Compromise program. We also have very good working relationships with the IRS in settling these debts.
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The Internal Revenue Code authorizes the IRS to accept less than full amount of tax liability owed in any civil or criminal case arising under the tax laws prior to the case’s referral to the Department of Justice. For an Offer in Compromise to be accepted, the taxpayer must establish to the satisfaction of the IRS that the taxpayer either: has no means of paying the tax, or does not actually owe the tax.
In the past, the IRS has been reluctant to settle tax liabilities. In 2013, the IRS announced new procedures for settling back taxes. The new procedures greatly liberalized the Offer in Compromise process and increased the likelihood that financially distressed taxpayers would be able to settle their liabilities for less than the full amount.
The IRS will accept an Offer in Compromise when it is unlikely that the tax liability can be collected in full and the amount of the Offer in Compromise reasonably reflects collection potential. An Offer in Compromise is a legitimate alternative to declaring a case as currently not collectible, or to a protracted installment agreement. The goal is to achieve collection of what is potentially collectible at the earliest possible time and at the least cost to the government.
An offer can be a final solution to your Tax Debt problems.
An Offer in Compromise Is Not An Amnesty Program
The IRS has the authority to settle or compromise federal tax liabilities by accepting less than full amount under certain circumstances. One of the following factors must be established in order for the IRS to accept an Offer in Compromise and settle the liability:
- The taxpayer cannot pay off the liability;
- There is doubt that the taxpayer actually owes the liability;
- The settlement would promote effective tax administration.
Incidentally, the IRS is not the only agency with an Offer in Compromise program. We have also helped our clients in settling delinquent taxes owed to State taxing agencies.