- Overview: Learn about IRS Offers in Compromise.
- Problems: Understand the problems associated with an IRS Offer in Compromise.
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Solutions: The W.L. Henry law firm’s goal is to solve your back tax problems. Find out how the firm uses an offer in compromise to settle your back tax debt for less than your outstanding tax liability.
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Schedule an Appointment: Schedule a free consultation with a tax lawyer. Colorado office locations are conveniently located in Castle Rock and Colorado Springs. We offer a free phone consultation if you reside outside the Denver or Colorado Springs metro area or in another state or country.
Overview
An offer in compromise is an agreement between the IRS and the taxpayer to settle a debt for less than full payment. An offer in compromise must be in the best interest of the IRS and the taxpayer. The IRS can compromise a debt based on one of the following reasons:
- Doubt as to Liability: there is doubt that the assessed tax is correct.
- Doubt as to Collectability: the IRS cannot collect the amount owed (from assets or income).
- Effective Tax Administration: the collection of the tax would create an economic hardship or would be unfair or inequitable.
Beware of unscrupulous tax promoters promising debt reductions of “pennies on the dollar” or other unrealistic results. Submitting frivolous offers in compromise can be expensive and make you appear dishonest before the IRS agent making the agent less likely to work with you towards an acceptable solution.
An offer in compromise program has stringent requirements that must be met before the IRS will accept the compromise. Only by understanding the facts of your case can an attorney or other tax professional determine if an offer in compromise is applicable to your situation.
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Problems
An offer in compromise may not be the best solution for your tax situation. For example, a pending offer in compromise will suspend the period for assessment and collections (statute of limitations). So, if the period for collections would have run out, you may be giving the IRS more time to collect the tax while the offer is pending. Additionally, the tax debt may be completely dischargeable in bankruptcy, which may be the better solution for your tax problems. Finally, by signing an offer in compromise, you give up your right to contest the liability in court.
An offer in compromise may appear relatively simply on its face; however, it is a legal argument that the IRS will only accept if your case meets the criteria established by law. Contact your tax lawyer to determine if an offer in compromise is the best solution for you.
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Solutions
The W.L. Henry law firm examines if an offer in compromise is the right tax solution for you. Rather than simply filling in a form and doing nothing more, we examine your entire case and collection history to determine if the IRS’s collection procedures were lawfully followed; if the statute of limitations on collections has run (making it impossible for the IRS to try to collect your tax debt); if there are any arguments to avoid the underlying tax liability; and how to best position your individual situation so the IRS will accept any offer in compromise.
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Schedule an Appointment
Schedule a free consultation to discuss your case with a tax lawyer. Colorado office locations are conveniently located in Castle Rock and Colorado Springs. If you are out-of-state or out-of-country, a telephone conference can be scheduled. All initial consultations by phone or in one of our Colorado offices are free.
Even if you are not sure if you need a tax lawyer, the firm is happy to discuss your tax issues and point you in the right direction.
Schedule a free consultation:
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