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How Can I Qualify For An Offer in Compromise?

Offer in Compromise is a tax resolution program developed by the IRS. With this form of tax resolution, the taxpayer is allowed to settle their tax debt for less than the full amount they owe. This tax relief option provides the taxpayer the opportunity to get a fresh start with the IRS. How do you know if you will qualify for an Offer in Compromise program with the IRS? Knowing how to navigate the IRS’ Offer in Compromise program can be tricky. That’s where an experienced tax resolution expert can come in handy. The professionals at Platinum Tax Defenders have years of experience helping their clients win Offer in Compromise applications. In this blog, we will discuss how you may be able to qualify for an Offer in Compromise program. If you think this program might be for you, contact the experts at Platinum Tax Defenders for your free consultation.

Is Offer in Compromise Right for Me?

When determining if an Offer in Compromise is right for you, you must first understand the eligibility requirements. To be eligible for an Offer in Compromise tax relief program, you must:

  • Have filed all recent tax returns
  • Received a bill for at least one tax debt included on the Offer in Compromise
  • Make any and all required tax payments for the current year
  • Complete any and all required federal tax deposits for the current quarter. This requirement is only for business owners who have employees.

What Other Factors Does The IRS Consider for Offer in Compromise?

Aside from the above requirements, the IRS also considers several factors when determining eligibility. The IRS will consider the following when determining your financial hardship:

  • Income
  • Expenses
  • Asset equity
  • Lifestyle
  • Age
  • Level of education
  • Collection statute expiration date

It’s essential to keep in mind that not all OIC (Offer in Compromise) cases are the same. While the above are eligibility requirements, every case will differ. You should also know that your lifestyle will play a factor in whether you get approved for an OIC. In other words, if you are claiming financial hardship by drive an expensive car, that doesn’t look so good.

How Does The IRS Review My Financial Situation for an OIC?

The IRS will collect most of the information they need from the application you are required to submit. Additionally, the IRS will perform an investigation to find out more about you before they make a decision. If you can justify your expensive car or mortgage, the IRS will take that into consideration. The IRS doesn’t necessarily expect that you will sell your car or your house to pay back taxes. Additionally, while you’re under review, the IRS will continue to monitor your income. They will want to make sure that at no point you become eligible to pay your tax debt.

How Do I Apply for an Offer in Compromise?

Depending on your specific situation, you may have to submit the following forms to apply for an OIC.

Form 656

This is the form the IRS requires to make the offer. Form 656 outlines the agreement between you and the IRS. This form will outline how much you are agreeing to pay to cancel your outstanding debt with the IRS. If you want to waive the application fee because of your income level, use this form. Should you receive approval, this form will waive the OIC processing fee. Additionally, if you are approved, this form can weigh the 20 percent down payment on the amount offered.

Form 433-A

This form is called Collection Information Statement for Wage Earners and Self-Employed Individuals. The IRS uses this form to determine your financial hardship. You must list your income, expenses, assets, and liabilities. If you are approved for an OIC, this form will have to be resubmitted to the IRS. You will have to resubmit this form to ensure there have been no changes to your financial situation. The IRS can demand you resubmit this form at any time to reflect your current income and expenses.

Form 433-B

This form is called the Collection Information Statement for Business form. Form 433-B is similar to the financial statement form, but for businesses.

Offer in Compromise

Mistakes To Avoid When Applying for Offer in Compromise

Working with a tax resolution specialist can help you avoid some common mistakes when filing for an OIC. However, it’s good to be aware of what those mistakes are. Even the smallest of errors can have a significant impact on a case. Additionally, mistakes can lead to confusion and slow down the application process. Some errors may even get your Offer in Compromise rejected right away. Making mistakes can be timely and costly. Below are a few mistakes you will want to avoid making.

 

Check your Work When Filling out Forms

One of the worst things you can do when filling out OIC forms is doing lousy math. Make sure you have your tax resolution professional carefully review your work.

 

Don’t Leave Spaces Blank

If there are fields on the application that don’t apply to you, mark “N/A” or zero. You want to avoid leaving any blank spaces on your application.

 

Negative Equity

Sometimes your property is worth less than you owe on it. If it is, you don’t want to subtract the negative equity from your realizable equity accidentally. Any asset with negative equity should have a listed capital of zero.

 

How Do I Fill Out Offer in Compromise Forms?

The best way to file for an Offer in Compromise is to do it with a tax resolution specialist. The experts at Platinum Tax Defenders have been helping their clients pay less than they owe for years. In one case, Platinum Tax Defenders successfully lowered a client’s tax debt from over $100,000 to just $100 with an Offer in Compromise. A professional will be able to ensure you are putting your best foot forward when applying for an Offer in Compromise.

 

What If I Get Rejected from An Offer In Compromise?

If the IRS rejects your Offer in Compromise application, you still have options. You and your tax resolution specialist can submit Form 13711. However, you must provide this form within 30 days of receiving your OIC rejection. The appeal will have to address the issues raised in the OIC rejection. You will also likely have to submit additional documents. If you have been rejected from an OIC application, work with a tax resolution expert. The professionals at Platinum Tax Defenders have years of experience working directly with the IRS.

 

Want To Apply for An Offer in Compromise? Call Platinum Tax Defenders

The tax relief experts at Platinum Tax Defenders have years of experience helping clients get out of tax debt. If you are working if an Offer in Compromise is right for you, call Platinum Tax Defenders today. Platinum Tax Defenders is currently offering free consultations to new customers. For more information, visit www.platinumtaxdefenders.com, or call 866-866-8053.

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I received a letter from the IRS and it says that I didn’t file my taxes. In order to get some assistance, I found Platinum Tax Defenders! The staff took time on the phone with me to really understand my situation also my needs. The staff was friendly and helpful. I highly recommend Platinum Tax Defenders!!!

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