How To File An Offer In Compromise

Copyright (c) 2012 Briana Colfer

When a taxpayer needs tax help they often file an offer in compromise whereupon they enter into an official agreement with the I.R.S. If the I.R.S accepts the offer the taxpayer then only has to pay part of his or her back taxes. Tax lawyers can help you submit this offer or you can get it at the IRS.gov website. Since the form is 28 pages long, people usually hire someone to take care of this filing for them.

According to this form, tax help could be a few steps away. There are a few simple qualifications that must be met before an offer in compromise can be accepted. First, All tax returns must be filed and up to date, and all estimated tax payments must be made for the current year. If you own a business, all federal tax deposits for the current quarter need to be up to date as well. If you are currently involved in an open bankruptcy case, the prepared Offer in Compromise will not be accepted.

There are a few things to keep in mind when you decide to submit an offer in compromise, or if you have your tax lawyer submit one for you. Interest will still build up on your account. If the tax period isn't over, i.e. Taxes aren't due to be filed yet, or those taxes that are filed have not yet been assessed, you cannot submit an offer for that period. If you have already had a lien placed on an item of yours, the item will still be held until the offer is approved; however, no new liens should be placed during the application process.

The Offer in Compromise does carry a fee of $150, which will be waived for those who fall under low income certification guidelines. After your offer is accepted, you will be able to choose from 2 different payment plan options. If you can pay one the shorter plan, the government will often accept a lesser amount. Tax lawyers may be able to help you submit the best compromise, and increase the likelihood of being accepted. If your offer in compromise is not accepted, a reputable tax lawyer may be needed to help you explore other options. You do have thirty days to dispute the rejection.

Tax attorneys often know what options are out there, and they may be able to help you meet the qualifications for this offer, or they may have more detailed information on repayment options. The most important thing to remember is to maintain contact with the IRS, and make payments that you can afford as often as possible. If you are putting forth every effort to make payments, the IRS will be more willing to work with you, and less likely to garnish bank accounts or place liens on your property.

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