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IRS: How an Offer in Compromise works

IRS: How an Offer in Compromise works

One of the debts that most affects your emotional and economic tranquillity is the debt with the Internal Revenue Service. There is currently a large percentage of taxpayers who have this problem, but there is a class of taxpayers who have been increasingly difficult to comply with the IRS, the truck drivers. Many truckers are very organized and try to comply with their tax obligations, but others for reasons beyond their control are unable to pay their taxes on time, accumulating year after year an unpayable debt.

The IRS in its special edition of July 26, 2017 says: "Taxpayers who have a tax debt that they cannot pay may have heard or read that they can settle their tax debt for less than the total amount owed. This process is called an offer in compromise.” Although before requesting an offer in compromise, there are some things you should know.

In general, the IRS cannot accept an offer in compromise if the taxpayer can pay what they owe. Taxpayers must first explore other payment options. A payment plan is a possibility. Visit your tax professional to obtain information about payment plans: payment agreements.

A taxpayer must file all the required tax returns before the IRS can consider an offer in compromise. When requesting an offer in compromise, taxpayers may need to make an initial payment. The IRS will apply the payments presented to reduce the taxes owed.

The IRS has a tool on their website that you can use to know if you are qualified to submit to an offer in compromise. Taxpayers can find out if they meet the basic qualification requirements. The tool also provides an estimate of an acceptable offer amount. Something very important that you must remember is that it is neither the IRS nor you that determines this amount but your financial situation. The IRS will make a final decision on whether to accept the offer based on all the information presented in the application.

Taxpayers that would like to request an Offer in Compromise should visit the Offer in Compromise page on the IRS website for more information or seek the help of a professional with experience in this field. It should also be taken into consideration that the professional that you choose must have the corresponding credentials: Agent Enrolled with the IRS, Tax Attorney or CPA.

Taxes at the Wheel


Edic.: 144
Autor: Gustavo Nuñez
Date: 7/2019