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Could an offer in compromise suit your tax debt situation?

On Behalf of | Apr 30, 2018 | Tax Law

Though the tax filing season for 2018 has come to an official close, you may still face a great deal of worry concerning your situation. You may owe a considerable amount in taxes but feel that you do not have the means to address your tax debt. Because you are dealing with a government institution when it comes to the Internal Revenue Service, you likely already feel ill at ease and believe that punishment for not paying your debt is right around the corner.

Fortunately, you may have options for addressing your tax debt, and you do not have to feel frightened exploring these options. The IRS itself offers certain assistance measures that could help you address your situation in an effective manner. One possible route involves an offer in compromise.

Offer in compromise

An offer in compromise with the IRS somewhat resembles a debt settlement offer. It works to help you and the IRS come to an agreement in which you pay less than the amount of tax debt currently owed. Of course, you must meet certain requirements, and the IRS will consider the following information regarding your case:

  • Whether payment in full will cause you financial difficulty
  • Your overall ability to pay
  • Your assets versus the amount you owe
  • Your household expenses
  • Your income

You may also want to keep in mind that an OIC is not for everyone, and you may not meet the qualifications. Though this option may seem like a catch-all answer to your problems, it can prove difficult to obtain. Because of this difficulty, you may want to ensure that you consider your other options for addressing your tax debt before thinking an OIC is a viable route for you.

Gaining more information

Because obtaining an OIC and understanding its usefulness may not come easy, you may benefit from gaining more information on this option. Additionally, you will want to ensure that the information you obtain is reliable and applicable to your situation. Misinformation could have you believing that this option works for your case when that may not prove true.

Luckily, local Illinois legal resources could help you ensure that you gather the correct information for your circumstances and understand the options that may best help you address your tax-related issues. By taking this step, you may come to find that an OIC suits your needs or that another option could offer more help.