Tax Law: Offers in Compromise

 Posted on May 05, 2016 in Tax Appeals

If the IRS has surprised you with a significant tax bill, and if either your true liability for the tax or your ability to pay it are in question, you may be able to make an offer in compromise.

An offer in compromise is essentially what it sounds like: you make the IRS an offer to pay an amount (presumably, less than the full amount) in compromise. You agree that you will pay the agreed-upon amount instead of continuing to fight the matter, and the IRS in turn agrees to accept the amount rather than pushing for you to pay the debt in full.

When you inform the IRS of your intent to utilize the offer in compromise process, the IRS will typically halt collection activity on your account in order to provide you with the time to gather supporting documents and assemble your offer. After you turn in your offer, the IRS will evaluate it, and will either accept it, reject it outright, or make a counter-offer.

An offer in compromise can be a very fact-driven proceeding, with the IRS either accepting or rejecting it depending on what information you have provided, so be sure to consult an attorney who specializes in tax law. Doing so will often be the difference between an offer that is rejected and one that is accepted .

Contact us today to discuss your situation. Depending on the facts and circumstances, you may find that your position is not as dire as it may appear. We look forward to working with you.