Offers In Compromise – A Guide

If you owe a large sum in back taxes and penalties to the IRS, and it is unlikely that you will ever be able to pay the full sum off, you may be eligible for an offer in compromise. Essentially, an offer in compromise is an agreement that is reached by your tax attorney, where you agree to pay a reduced sum, and the IRS waives the remainder of your debt. There are several reasons why the IRS may agree to a compromise such as this.

• There is doubt as to your liability, or doubt as to whether the tax total that was assessed is correct. If there is any doubt that an error was made, you may be able to reach a compromise with the right tax help.
• If there is doubt as to whether the full amount could ever effectively be collected, the IRS may agree to cut their losses and take a reduced sum. They will take into account extreme financial hardship, and may agree to let you off the hook for less if the need seems obvious.
• Finally, if there is doubt as to effective tax administration, you may reach an offer in compromise.

If you think you may be able to reach this compromise with the IRS, you must start by filing all delinquent tax returns with your lawyer, who can then begin to work towards extending an offer. Levy Tax Associates have years of experience in reaching these agreements, and can help determine if you are eligible through a free consultation.