How to Get an IRS Offer in Compromise Approved
Paying off your IRS tax debt can be challenging if not almost completely impossible depending on how much debt you have accrued. The IRS expects most people to pay the full amount of the debt that is owed, but in reality that may not be possible. One of your best payment alternatives is to pursue an Offer in Compromise. This type of offer means that you are not able to pay the full amount of tax debt that is owed so you offer to pay a smaller amount to the IRS. These offers can be difficult to get approved, with the success rate being around 15%. There are a few tips and tricks you can use to help increase your chances of having your offer accepted by the IRS.
It is important to understand that in order to have an Offer in Compromise accepted by the IRS, you must prove that you have no other means available to pay off your debt. If you own multiple properties that are worth enough money to pay off the debt, your tax settlement offer will more than likely be rejected. This is only an option for most people who are struggling financially, not those who are trying to pay off their debt for pennies.
Make sure that as you are applying for a tax settlement using an Offer in Compromise that you include a 20% down payment along with your offer. The IRS will not accept any offers that do not have this included, and most of the time they will send the offer back without even looking it over.
Do not file for bankruptcy before you apply for the Offer in Compromise. The IRS will not be able to work with the tax settlement offer you made if you have already filed bankruptcy. Make sure that you fill out the 656 form correctly. If this information is not filled in correctly, the offer will be returned to you. Make sure that all of your financial formulas are correct so that your offer will be correct also.
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