Eligibility for an Offer in Compromise

Most people have heard about Offer In Compromises.   An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed.  If the liabilities can be fully paid through an installment agreement or other means, the taxpayer will in most cases not be eligible for an OIC.  An offer in compromise is not merely about offering an arbitrary amount to pay to settle the taxpayer’s account, but rather subject to financial computations and IRS rules.

To be eligible for an offer in compromise and before you submit your offer, you must:

  • File all tax returns you are legally required to file
  • Make all required estimated tax payments for the current year
  • Make all required federal tax deposits for the current quarter if you are a business owner with employees.
  • If you or your business is currently in an open bankruptcy proceeding, you are not eligible to apply for an offer. Any resolution of your outstanding tax debts generally must take place within the context of your bankruptcy proceeding.

If you need assistance with preparing an Offer In Compromise, we at Lefstein-Suchoff CPA & Associates can assist you with this or other tax or IRS problems, please contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com

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