Offer in Compromise, Myths and Misconceptions

We have all heard the advertising on radio or television on how to manage your Tax Debt with the IRS for pennies on the dollar, and you often wonder whether these advertisements are true or not. Now, what this advertising will not betray that most taxpayers not qualify for an Offer in Compromise if you are able to meet certain criteria.

An offer in compromise is, if the taxpayer agrees to pay its tax debt with the IRS for less than the full amount owed. If you owe the IRS $ 25,000.00 and meet certain requirements and then pay the IRS a check for $ 2,000.00 to meet your tax liability, then this is an offer in compromise.

The IRS is like any other company. If people owe them money and they are having a hard time collecting money, the IRS figures that is slightly better than no money. So you have the offer in compromise program.

First Myth - Do not worry unfiled year - even before you can can submit a bid, you have to date in all your tax documents with the IRS. Often when people owe the IRS money they to stop filing their tax returns for subsequent tax years. If this is the case, then the taxpayer must first be current with all of its delinquent tax year.

Second Myth - The IRS quickly approved your offer - make an offer is very time consuming on both sides of the taxpayer and the IRS. Laying The taxpayer must accurately disclose all their personal financial information to the IRS and the IRS often will request additional information.

Third myth - I can only draw a number out of thin air and say that the IRS how much would I pay to settle the debt. The IRS has a set of strict guidelines that must be followed to determine how much they accept as payment in an offer and compromise. The taxpayer has different financial disclosure forms such as complete Form 433 or Form 433-B-A. These forms are very detailed, and the honest taxpayer must complete these documents or the IRS will reject the offer.

Once the paperwork is complete, the IRS will look at what geographical area of the country you live on this information it will come to see with a dollar amount of your monthly living expenses basis. This is all information that identify the IRS to determine whether you are eligible for an offer in compromise and the minimum amount that they will accept from you as payment in full use.

If a person or company owes money to the IRS an offer in compromise is a way to settle your IRS debt exactly. However, it is a very complicated process and with the help of support to offer a qualified Tax Professional, you can significantly increase your chances of a successful submission.

Editor Tips

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