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Offers in Compromise

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In certain circumstances, the Internal Revenue Service may agree to settle an outstanding tax debt for less than the amount owed. Although this solution is understandably appealing to those who owe the federal government money, it’s also important to understand that the IRS believes most taxpayers can repay their debts. As a result, it usually refuses Offer in Compromise requests.

The good news is that BC Tax has helped clients in Denver, Colorado and across the country successfully negotiate an IRS Offer in Compromise and achieve a debt settlement.

If you owe the IRS a large tax debt that you cannot repay, we can help.

What Is an Offer in Compromise?

The Offer in Compromise program allows taxpayers to satisfy a tax debt for less than the amount owed provided that the taxpayer cannot pay any other way. Other ways include making payments through an installment plan, using the Fresh Start program and satisfying the debt using other assets.

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How to Get an Offer in Compromise Accepted

The IRS will review the documentation plus evaluate other factors. You must demonstrate deficiencies in your income and ability to pay, prove expenses and share asset equity data. Based on this information, the IRS will calculate reasonable collection potential. Unless your Offer in Compromise meets or exceeds this value, the IRS probably will not accept your proposal.

Offer in Compromise Tips

Ability to pay and reasonable collection potential are just a few of the criteria the IRS uses to evaluate your Offer in Compromise. To succeed, you’ll also need to:

  1. File all tax returns so that you’re up to date with the IRS
  2. Make any required estimated payments
  3. Remit payroll taxes on time and as promised if you’re a business owner with employees
  4. Delay filing for bankruptcy, as the IRS will not accept an Offer in Compromise if you’ve filed for bankruptcy protection

 

BC Tax can provide further assistance that may increase the chance that the IRS will accept your Offer in Compromise. For example, we can:

  • Assess your situation to evaluate liability: In some cases, the IRS may decide to accept an Offer in Compromise if it believes the amount owed is disputed or should not be paid.
  • Evaluate your ability to pay: If the IRS believes it cannot collect the full amount owed based on your income and assets, it may accept an Offer in Compromise.
  • Evaluate exceptional circumstances: If there is no dispute as to the amount owed and the IRS could collect the full debt, it may accept an Offer in Compromise if collecting the full debt would create an unfair economic hardship.

Turn to BC Tax for IRS Debt Settlement in Denver, Colorado and Across the U.S.

BC Tax has helped individuals and businesses throughout Colorado and the country settle their debt with an IRS Offer in Compromise. In some cases, our professionals have saved eligible taxpayers tens of thousands of dollars through debt settlement services.

Don’t let tax debt keep you up at night. For more information on negotiating an Offer in Compromise or settling an IRS debt, get in touch with BC Tax by calling (800) 548-4639 or completing our online form.

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