Owed IRS Taxes? Here Is One of Solutions You Might Qualify to Wipe Out Your Debt
What is Offers in Compromise (Pennies-On-The-Dollar)?
-By Sean Tang, EA, Tax Resolution Specialist
The Offer in Compromise is probably the most commonly known tax resolution strategy. This is what you hear about in TV commercials and radio ads, particularly when they talk about settling your tax debt for “pennies on the dollar”
It is important to keep in mind that not everybody even qualifies for an Offer in Compromise, not to mention that this is only one of the many options that might be available to you. Each option must be explored in relation to the specific facts and circumstances surrounding your tax problem and then the best option can be selected and implemented.
In some instances, it may be necessary to employ two or more options to settle your tax obligations. Keep in mind that the ultimate goal is to solve your tax problem permanently and for the lowest amount allowed by law.
The IRS Offer in Compromise program allows you to pay the IRS less than the full amount of your tax, penalties, and interest, and pay only a small amount as a full and final settlement. This program also has an option for Doubt as to Liability. In these cases you disagree with the amount of the tax assessment and this gives you a chance to file an Offer in Compromise and have your tax assessment itself reconsidered.
The Offer in Compromise program allows taxpayers to get a fresh start. In this process, all back tax liabilities are settled with the amount of the Offer in Compromise. Once the payment amount of the Offer in Compromise is fully paid off, all Federal tax liens are released. An Offer in Compromise filed based on your inability to pay the IRS looks at your current financial position, considers your ability to pay (income minus expenses), as well as your equity in assets. Based on these factors, an offer amount is determined. You can compromise all types of IRS taxes, penalties, and interest in one fell swoop. Even payroll taxes, which are often the most difficult to resolve, can be compromised. If you qualify for the Offer in Compromise program, you may be able to save thousands and thousands of dollars in tax, penalty, and interest.
I will explain more in detail in my future article about this solution. Please keep in tune and if you have any question, feel free to give me a call at 814-769-0202 or firstname.lastname@example.org for a FREE Tax Debt & Transcript Analysis and Choices of Alternative Solutions Session