Do You Qualify for the Offer in Compromise Program?

An offer in compromise is an agreement between a taxpayer and the IRS in which both parties agree to settle the debt owed for less than the actual amount. While this is something that many taxpayers are interested in, there are requirements that must be met. On average, the IRS accepts only approximately 10 to 15 percent of offers received.

Do I Qualify for an Offer in Compromise?

From the start, you should know that you will not qualify for an offer in compromise if you are able to pay your tax debt in full–either in one lump sum or through a payment plan.

There are three grounds on which you may qualify for an offer in compromise:

  • Doubt as to collectibility–There is doubt that the taxpayer has or ever will have enough money to pay the tax debt in full by the time it is due.
  • Doubt as to liability–There is doubt that the tax bill assessed is 100 percent accurate.
  • Effective tax administration–The taxpayer must be able to prove that collection of the tax in full will cause advanced economic hardship.

If you are unsure of whether you quality for an offer in compromise, it is best to speak with a tax professional.

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