Eliminate Tax Debt with an IRS Offer in Compromise

Are your unpaid back taxes overwhelming you? Are you looking for tax debt relief?  If you don’t think you will ever be able to pay off your tax debt, you may be able to eliminate a large portion of your tax debt with an IRS Offer in Compromise.

With an Offer in Compromise, the IRS may agree to settle your tax debt for less than you owe.

There are three types of Offers the IRS will accept to settle a tax debt.

Doubt as to Collectibility
If you can show that you do not have the assets or the income to pay off the tax debt, the IRS will take what they can get, and write off the rest of your tax debt. Be warned, it is the IRS that determines how much you need to live each month, and what your assets are worth. But if you have no assets, and your income is not enough to meet the IRS’s definition of required living expenses, you have a good chance of having your offer in compromise accepted.

Doubt as to Liability
If can show that there is uncertainty as to whether or not you actually owe the taxes assesed, the IRS may be willing to settle for considerably less than the original assessment. If you believe the tax examiner interpreted the law incorrectly, or failed to consider all the evidence submitted, it may be worth requesting an offer in compromise to settle your tax debt.

Effective Tax Administration

Believe it or not, the IRS will reduce your tax debt if you can show that paying it would create an extreme hardship, or would be unfair under the circumstances. Once again, if you can sway the IRS to your point of view, it is possible to eliminate thousands of dollars in tax debt.

If you think that you might benefit from an Offer in Compromise, see the IRS website for more information, and for the forms required.

4 thoughts on “Eliminate Tax Debt with an IRS Offer in Compromise”

  1. It is interesting that you said the IRS would right it off. Who would they be writing it off to? Most people write things off to the IRS. I am guessing you just meant take the loss and used ‘write it off’ as an expression but it still read as funny.

  2. I am a Diabled Veteran. I collect a retirement check every month from the military. I also am getting social security. The IRS is taking the maximum money they can out of my SSN check, and they have been for over two years ($169.00 Amonth). I am confused by this because apparently, the interest a month on what they SAY I OWE, is more than the lien that has been levied. I am imbarrased to say that I have not filed a tax return since about 1999. Partly due to a messy divorcein which my spouse did not file the taxes as had been the history. I got behind the filings, and could not afford one of those “SETTLE WITH THE IRS AD PEOPLE ON T.V. I am affraid to contact the IRS to ask exactly how much I owe and ask for a little lienency. I was diagnosed with cancer about three years ago, and have not worked since. I am affraid that they will start after my military retirement check again. (Last time they took it all for 18 months, and ended up giving about 40% of it back) Any REAL help out there?

  3. Mark,
    You sound like a perfect candidate for an offer in compromise. It is a lot of work, so any professional is going to charge a lot of money. It may be well worth it. Don’t go to someone who is advertising on TV. Find a local Enrolled Agent. They will be able to help you file your back taxes and work out a deal with the IRS. Without knowing all the facts I can’t know for sure, but you may be able to settle your tax debt for far less than you owe, and be done with it for good. The peace of mind is worth whatever fees you may need to pay to a professional.

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