What Is An Offer In Compromise?
If you are struggling with an overwhelming tax burden, it can be difficult to know where to turn. Few people are aware of an option called an offer in compromise. Although hard to obtain and with very strict requirements, a successful offer in compromise can provide relief by forgiving some of your debt. But without the right guidance, getting one is tough at best.
Pay What You Can Afford
The idea of an offer in compromise is to provide a way for anyone to get back current with their IRS debt, even if the amount that they owe is far more than they can afford. Typically what happens is the individual applies under the program and then the overall payment is reduced proportionally. Most people aren't aware that the IRS is actually capable of removing part of a debt and accepting a lower amount instead. But for people who have substantial back payments owed, it's often a more realistic proposition than rigid demands for the original amount.
Getting One Isn't Easy
As you might imagine, there are rather strict requirements for getting into this program. According to some IRS estimates, less than a quarter of all applicants are actually accepted. Part of the reason for this is the need to show demonstrable and clear inability to afford the full amount. The definition of financial hardship can be variable, and in particular it might appear different to one individual versus how it looks for the government. Even if you are eventually awarded one, the process can take a long time - the government has up to 24 months, or a full two years, to consider a given case.
Professional Assistance Matters
As with almost anything related to taxation, there are a lot of legal hoops you'll need to jump through in order to successfully submit yourself to the program. Along the way, there are many pitfalls and potential areas where you might improve your chances. But even if you're simply concerned with successfully filling out the forms and gathering the necessary data, you'll need someone knowledgeable to guide you through.
No company can absolutely guarantee that you'll be accepted into the program, so be wary of any that does make such a claim as they are probably not really knowledgeable and can't help you. An honest company will tell you about the odds and do everything they can to help you beat them. They'll provide a free assessment first, helping you understand whether this kind of resolution is even a viable option for you. Look for a company that is concerned with your well-being first and foremost, offering consultations and only charging you if you can get some benefit from the services.
Pay What You Can Afford
The idea of an offer in compromise is to provide a way for anyone to get back current with their IRS debt, even if the amount that they owe is far more than they can afford. Typically what happens is the individual applies under the program and then the overall payment is reduced proportionally. Most people aren't aware that the IRS is actually capable of removing part of a debt and accepting a lower amount instead. But for people who have substantial back payments owed, it's often a more realistic proposition than rigid demands for the original amount.
Getting One Isn't Easy
As you might imagine, there are rather strict requirements for getting into this program. According to some IRS estimates, less than a quarter of all applicants are actually accepted. Part of the reason for this is the need to show demonstrable and clear inability to afford the full amount. The definition of financial hardship can be variable, and in particular it might appear different to one individual versus how it looks for the government. Even if you are eventually awarded one, the process can take a long time - the government has up to 24 months, or a full two years, to consider a given case.
Professional Assistance Matters
As with almost anything related to taxation, there are a lot of legal hoops you'll need to jump through in order to successfully submit yourself to the program. Along the way, there are many pitfalls and potential areas where you might improve your chances. But even if you're simply concerned with successfully filling out the forms and gathering the necessary data, you'll need someone knowledgeable to guide you through.
No company can absolutely guarantee that you'll be accepted into the program, so be wary of any that does make such a claim as they are probably not really knowledgeable and can't help you. An honest company will tell you about the odds and do everything they can to help you beat them. They'll provide a free assessment first, helping you understand whether this kind of resolution is even a viable option for you. Look for a company that is concerned with your well-being first and foremost, offering consultations and only charging you if you can get some benefit from the services.
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