Offer In Compromise - A Viable Tax Debt Relief Option

If you are overwhelmed with debt there is a good possibility that one of those may be a tax debt. There are solutions and depending on whom you speak to they will give you their version. Some will say that the IRS will not negotiate with a taxpayer, while others will tell you that it's feasible to do so.

One must take into account that we are living in very difficult economic times and that many find themselves unemployed or in other difficult economic hardship and the IRS is aware of it and is willing to listen to your case and offer remedies.

One of those possible remedies is the Offer of Compromise program that was established in 1991. The Offer In Compromise involves a situation where the IRS will accept less the entire amount owed as full payment of your outstanding tax debt. This is usually is based on your economic inability to pay the amount owed, although it it is also applicable in cases where the taxpayer does not believe he owes the amount that is outstanding.

You must show proof through complete financial documentation to the IRS in order for them to determine your case to have merit. If your offer is accepted any liens that you currently have will be lifted and the they cannot levy other assets after the Offer In Compromise is filed.

In order to file an Offer in compromise you must file the appropriate forms with an application fee of $150 along with a non-refundable deposit equal to 20% of the amount that is in your Offer In Compromise. How long the process takes is dependent upon how many cases the IRS has in the district that you reside in. typical case take will take from six to twelve months.

The positive aspect of this is the collection efforts are suspended during this period. If the IRS accepts the compromise you will need to pay the amount agreed to as soon as possible and comply with any other requirements to file any forms that they instruct. You must also comply with all filing and payment deadlines for the next five years.

Regardless of what many say Offer In Compromise is a viable solution. It has the potential of lowering your tax liability and during the process, collection efforts cease and your assets are not subject to levy. This is one option you should explore if you find yourself in the position of not being able to pay the taxes you owe.

As with anything else that has its nuances, it is recommended that you consult with a tax professional who can help through the process.



By Irma Montes
I have been in the finance industry for many years and enjoy writing article to help individual find Tax Debt Relief. If you would like to read more of my article, please visit us at IRS Debt Settlement: http://irsdebtsettlementhelp.com/