Bitton CPA PLLC

Offers In Compromise

Do you owe money to the IRS? If the answer is yes, there are several collection options available to you that we can negotiate on your behalf.

One option is a tool called an "Offer in Compromise". It is an agreement between you (the taxpayer) and the IRS that allows you to settle your debt with the IRS for less than the full amount owed if you qualify.

There are 3 types of Offers available:

  1. Doubt as to liability - You are disputing the amount of tax assessed, wholly or in part.
  2. Doubt as to collectibility - Mostly used. The IRS will not accept this type of offer if they believe the liability can be paid in full, as a lump sum or through an installment payment agreement. The IRS will look at your income and assets to determine your financial hardship level.
  3. Effective Tax Administration - Under this scenario, you are not disputing the amount of the tax you owe and you likely will not qualify for a Doubt as to Collectibility offer. This means that you have enough equity and assets to pay the tax liability in full but due to special or exceptional circumstances, liquidating your assets would create an economic hardship. This is potentially a good option for the elderly and disabled taxpayers who receive fixed income and live on this income.

Over time, more offers in compromise have been accepted by the IRS thanks to its Fresh Start initiative. With this initiative, the IRS has made changes to the OIC program that favor taxpayers.

Offers in compromise is a lengthy and tedious process that requires the help of a tax professional.

We are happy to be your advocate here and take you through the whole process from start to finish! 

Contact us below for a free consultation to see if you qualify and how we can help!

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