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Making an offer in compromise may help relieve you of tax debts

On Behalf of | Oct 28, 2020 | Tax Law

If you’re behind on your taxes or simply cannot pay what you owe, one thing you may want to look into is making an “offer in compromise” to the IRS. Using the Internal Revenue Service’s Offer in Compromise tool, you can see if you qualify to pay less than you owe on your tax debt. 

Before you can have a settlement offer considered by the IRS, remember that you will need to file all of your tax returns. If you’ve missed past years, now is the time to get them filed, so that the IRS can determine what you really owe. Then, once you know, you can make the settlement offer. The IRS may ask you to make a payment on what you owe before they’ll consider the settlement. If so, know that the IRS will use that payment toward the taxes owed, which ultimately pays down some of your debt.

Finally, take note: If you can afford to pay what you owe to the IRS within the foreseeable future, you probably won’t qualify for an offer in compromise. An installment agreement may be a better option, depending on how much you owe. 

At the IRS’s website, you can find the basic qualifying information for the Offer in Compromise service along with guidance that can help you understand what kind of offer is likely to be accepted. That’s no substitution, however, for experienced assistance from an attorney. If you’re ready to get out of tax debt, making an Offer in Compromise may be a good idea. Our website has more on the steps to take next.