Are you a potential candidate for an Offer in Compromise? If you are an individual or a business taxpayer and you do not have the income, assets, or means to pay your IRS debt now, or in the foreseeable future, you just might meet the requirements.
The Offer in Compromise (OIC) Program is an offer you make to the IRS to pay only a part of the tax you owe; as much as you can, and they agree to accept that part as full payment.
Why would they do this?
To cut their own losses, of course. They want to get at least part of what you owe, rather than you not paying at all. It can be beneficial for taxpayers as well, allowing them to avoid the crushing collection efforts and continuing penalties imposed by the agency.
What are some of the Offer in Compromise requirements changes?
Previously the IRS looked at four years of your future income to determine how much you would have to pay if you agreed to pay off the debt within five months. The new policy only looks at one year, effectively reducing the amount owed by 75%. For an agreement to pay off a debt within two years (which is the maximum time allowed for any offer) they now look at only two years of your future income as opposed to five previously. This change results in a reduction of 60% of the amount owed.
These Offer in Compromise requirements changes are indeed welcome and will ease the burden of getting your debts paid off. In addition, the IRS has recognized that other debts to the government need to be respected, allowing for payment of student loans and delinquent tax bills to state agencies. The additional flexibilities added into the system are part of a number of changes introduced over the past few years, as a result of the continuing criticism from Congress and the National Taxpayer Advocate service. This change is being heralded as the most dramatic liberalization of IRS policies ever announced. We approve of the new Offer in Compromise requirements rules.
If you need assistance understanding if an Offer in Compromise or some other type of payment plan would be the best option for you, contact us. We can help. Call us at 888-727-8796 or email info@irsmedic.com.
