The Offer in Compromise is considered the Holy Grail of Tax Relief. The IRS settles a back-tax debt for less than the total amount owed. How much less? Well, that depends on your specific set of circumstances. Each Offer in Compromise is different, depending on the taxpayer.
One thing that’s consistent about all OICs is the list of prerequisites.
Tax Compliance Top Priority
Make compliance your first step. You’ve got to be in current tax compliance before submitting your OIC settlement request to the IRS.
What is current tax compliance?
- Estimated tax payments must be up to date. Your 1040ES payments need to be a priority, if required.
- File all necessary tax returns. If you’re missing tax returns, you’ll need to address them before the IRS considers your OIC.
The Final Step of your OIC
Tax compliance should also be your last step. It’s a stipulation of the IRS’ acceptance of your Offer. You’ll need to keep up with your tax responsibilities for 5 years after acceptance, or the IRS may reverse your settlement and go back to collecting the tax, penalties and interest.
Besides, it’s the right thing to do.
Contact us to find out how we help people fix tax problems.