IRS Offers In Compromise

IRS OFFERS IN COMPROMISE

You hear many advertisements that claim they can resolve your tax problems. These ads refer to the “brand new IRS programs”. What they are really referring to is a program administered by the Internal Revenue Service called an Offer in Compromise. The Offer and Compromise is not a new program. According to the IRS, an offer in compromise will be accepted if the amount offered by the taxpayer is equal to or greater than the reasonable collection potential.

IRS records show a dismal success rate for the Offer in Compromise, just a shade under 25%. Generally speaking, a successful offer in compromise will come from a taxpayer who has liabilities in excess of his or her assets and little to no disposable monthly income after allowing for basic expenses. Many advertised companies file on your behalf to the IRS, afterwards, the IRS will consider your case for about eight months during which time, your problems seem to stop. Then the IRS will likely send a rejection letter or make a counter offer for thousands of dollars. The entire time, you are out of the IRS collection loop, but interest is still accruing. If the offer in compromise is accepted you will likely have to make payments that you cannot afford, and if the offer in compromise is rejected, you will have wasted all the money you paid.

For those Offers that do work, it is usually because the taxpayer has used an attorney who analyzes your chances of success before taking your money. If the Offer in Compromise is not the way to go, John F. Waldron Law Firm will look at other options (installment agreements, waiting out the statute of limitations, liquidation bankruptcy, reorganization bankruptcy, etc.), and help you choose the best way. We have an exemplary success rate for Offers in Compromise because we only file an offer when we see a good chance of success.