Offer in Compromise

Offer in compromise is program developed by Congress to promote collecting large amounts of unpaid taxes in a relatively short period of time. If you are unable to pay a tax debt in full, and an installment agreement is not an option, then they may be able to take advantage of the offer in compromise program.

An offer in compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax debt. The IRS has the authority to “compromise”, that is to settle, federal tax liabilities by accepting less than full payment under certain circumstances. According to IRS, a tax debt can be legally compromised for one of the following reasons:

• Doubt as to Liability - Doubt exists that the assessed tax is correct.
• Doubt as to Collectibility - Doubt exists that you could ever pay the full amount of tax owed.
• Effective Tax Administration - There is no doubt the tax is correct, and no doubt that the amount owed could be collected, but an exceptional circumstance exists that allows the IRS to consider a taxpayer's offer in compromise. To be eligible for a compromise on this basis, the taxpayer must demonstrate that collection of the tax would create an economic hardship or would be unfair and inequitable.

The taxpayer must remain current on all tax obligations for a period 5 (five) years after acceptance of an Offer in Compromise. So, if your offer in compromise is accepted and paid in full, but he later fails to pay current income taxes or other taxes, the IRS might revoke the offer in compromise.

However, a taxpayer does not qualify for Offer in Compromise consideration based on a doubt as to collectibility or effective tax administration if:

• Taxpayer has not filed all federal tax returns, or
• Taxpayer is involved in an open bankruptcy case.

Contact San Diego Tax Attorneys and give some preliminary information so that we can assess your situation to determine if you qualify for the offer in compromise program. If you don't, our tax attorneys will explain why and recommend an alternate solution to your tax problem. San Diego Tax Attorneys use the same formulas and guidelines as the IRS, we are able to assess the lowest possible amount the IRS will accept before it is submitted, thus eliminating the guesswork and worry.

San Diego Tax Attorneys will help you with offer in compromise!

Read about offer in compromise and offer in compromise help at tax related websites