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DebtHelp.com Tip: Offer in compromise. This IRS tax resolution method has the IRS and you settling your income tax debt at less than the original amount. If you have determined that an installment payment plan would not be beneficial to you, you may apply for an Offer in Compromise. This is one of the last voluntary steps along the IRS collection process. The Offer in Compromise program is sometimes preferred over installment agreements that last years and cost the IRS money plus time.
The Offer in Compromise program compromises your total tax, interest, and penalties for an amount that considers your assets, income, and general ability to pay.
Both the IRS and you can benefit by becoming involved in an Offer in Compromise program. The IRS is collecting some unpaid taxes from you while you are paying less than the original amount owed. You can have the option of paying either in a lump sum or in installments.
This program does not come easy, though. You need to convince the IRS that entering in an Offer in Compromise agreement is the best option for them. Explain this in the cover letter you will need when applying.
Plus, the process is very time-consuming and extensive. There are definite procedures that you and the IRS need to follow in order to enter into an OIC.
Even though the IRS Offer in Compromise is a great way to reduce IRS debt, this tax resolution method is not a quick and easy fix. Sometimes Offers in Compromise can go for years. It is the most complicated and time-consuming of the methods used to collect unpaid taxes.