Offer-In-Compromise Eligiblity To Fix your IRS Debt

Is the IRS threatening you with garnishments or levies? If so, the IRS Offer in Compromise is a tax resolution possibility that you may qualify for, whether you’re an individual taxpayer or a small business owner.

An Offer in Compromise is an agreement with the IRS to settle the tax liability for less than the full amount. The OIC provides the most substantial tax debt reduction. However, the IRS doesn’t accept just any OIC application. If the IRS believes you can pay the tax debt in a lump sum or a payment agreement, they will require that form of tax debt settlement instead. The taxpayer’s income and assets are used to calculate the taxpayer’s reasonable collection potential.

The most recent Fresh Start Program updates included changes that made qualifying for an offer in compromise easier, like no longer counting equity in income-producing assets such as on-going businesses in the calculation of repayment potential.

Alleviate Tax navigates the offer in compromise qualifying process for you, alleviating your tax debt and potentially saving you tens of thousands in penalties, interest, and fees imposed by the IRS. Just how much tax debt have we been able to settle with an OIC?

One of our clients saved 98% of their original tax debt after we got them qualified for an Offer in Compromise.

We cut through the complicated IRS rules and calculations for you, handling the hard work while keeping you updated at each step of the OIC approval process. Our passion is getting the best results available to you!

Contact us using the form below for a free consultation from one of our tax specialists who will help determine your eligibility for an Offer in Compromise–one of the most beneficial forms of tax relief the IRS allows.

In under 15 minutes, you can start breathing easier knowing your tax burden is in the process of being lifted from your shoulders so you can get on with your life.

How does the IRS calculate the Offer in Compromise?

The IRS determines the tax debt reduction amount by calculating a taxpayer’s reasonable collection potential. Projections for one year of future income is used to calculate offers that can be paid off in five or fewer months. Projections for two years of future income is used for offers that can be paid off in six to 24 months. It’s important to keep in mind that the IRS will expect all offer in compromise agreements to be fully paid off within 24 months.

Who qualifies for an Offer in Compromise?

You might qualify for an Offer in Compromise:

• When there is doubt as to liability for the tax debt
• When there is doubt that the amount owed is fully collectible
• When paying the tax debt in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances

Of course, you’ll need to verify your financial details to prove you truly qualify for an Offer in Compromise. You’ll need to provide detailed documentation showing all of your assets and income sources, which will then be used to calculate your ability to repay your tax debt.

It’s important to note, before filing for an OIC, you must:

• Be current on all federal tax filings and payments.
• Not be in the process of bankruptcy proceedings.

Assets the IRS will use to qualify you for an OIC:

• Total Bank Balance
• Home equity (Home Market value minus home loan balance)
• Vehicle 1 equity
• Vehicle 2 equity
• Retirement account equity
• Other real property equity (rental, business, land, timeshare, etc.)
• Other assets equity (airplane, motorcycle, recreational vehicle, etc.)
• Stocks, Bonds, Money Market, CDs, other investments, etc.
• Miscellaneous equity (art, coins, gun collection, etc.)

Food, clothing, and miscellaneous allowable expenses:

• Rent or mortgage and utilities
• Vehicle 1 loan or lease payment
• Vehicle operating costs (gas, repairs, etc.)
• Public transportation costs
• Out-of-pocket medical expenses
• Health Insurance Premiums
• Life insurance premiums
• Federal, state, and local taxes
• Court-ordered payments (child support, alimony)
• Child/dependent care costs

Offer in Compromise Payment Options:

• Lump-Sum Cash Offer
• Periodic Payment Offer

How do you get an Offer in Compromise approved?

To get an Offer in Compromise application approved by the IRS, you must prove you cannot reasonably pay the tax debt. If you can prove repayment would create a financial hardship for you and your family, an Offer in Compromise might be an option for reducing your total tax liability to an amount that’s manageable for you. Eligibility for an Offer in Compromise depends on your individual circumstances and financial position, but in general, the type of financial hardship evidence the IRS considers includes:

• Job loss
• Significant reduction in work hours
• Drastic pay cuts
• Bankruptcy filing
• Injury or illness
• Inability to meet basic needs like rent, groceries, and utilities
• Insufficient earnings to pay the tax debt off in full within the maximum allowed time frame

To prove your inability to repay your tax obligations in-full, you must fill out the official IRS form for an Offer in Compromise, which is over thirty pages long and has over 25 sections.
Fortunately, you don’t have to endure this drudgery, because Alleviate Tax handles the lengthy, complicated, and highly detailed forms, maximizing your chances of success. You can relax knowing we’ll handle the heavy lifting of the OIC process while you move on with your life.