A settlement offer in compromise, according to the IRS, enables qualified taxpayers to pay less than their whole tax liability.
You will be able to get back on track and save some money in this way. For your information, this is feasible, but you will obviously need to adhere to the stringent guidelines set forth by the Internal Revenue Service.
It is undoubtedly a valid choice if you believe you will not be able to pay your entire tax obligation. When you think that paying down your entire tax due will put you in a difficult financial situation, this alternative is very beneficial.
As a result, it is crucial to determine whether you are qualified for a compromise offer or if you must find other options.
The facts and circumstances of the IRS:
The IRS will consider the following factors when determining whether you qualify for an offer in compromise:
- Equity in assets
- income, costs, and capacity to pay
Generally speaking, if the IRS believes the amount you are giving is the maximum the Agency can anticipate to collect in a reasonable amount of time, it may accept your offer in compromise. In any case, a compromise offer need to be considered as a last resort.
Therefore, before you go to this payment choice, be sure you have looked at all the others. Not everyone is eligible for a compromise offer.
An IRS offer in compromise is available
Using the IRS’s Offer In Compromise Pre-Qualifier is the most effective method to determine your eligibility for an offer in compromise. All you need to do is go to https://www.irs.gov/payments/offer-in-compromise, the official website.
Prior to doing so, review the requirements listed below:
- All necessary estimated payments were made by you.
- You submitted all necessary tax returns.
- You don’t currently have an open bankruptcy case.
- If you are applying for the current year, you have a valid extension for a current-year return.
- Before applying, you, as the employer, paid tax contributions for the previous two quarters.
Read Also: IRS Issues Urgent Warning: File This Form or Face a Penalty
What happens if you apply but are rejected?
It’s possible that you apply but aren’t eligible. Following that, the IRS must return your application and provide the application fee.
Additionally, any offer payment you include will be applied to your outstanding balance by the IRS. To avoid paying a charge, it is crucial that you confirm that you are eligible for a compromise offer before submitting an application.
On the other hand, you can apply if you believe you are eligible. Visit https://www.irs.gov/payments/offer-in-compromise for additional information.
