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But statistically, the odds of getting an IRS offer in compromise are pretty low. In fact, the IRS accepted only 15,154 offers out of 49,285 in 2021. Its not impossible, though. Heres how an IRS offer in compromise works, what it takes to qualify and what to know about the program.
The cons include: You may not qualify. Not everyone qualifies for OIC. This method is typically best for people who have very few assets and who are low income earners.
If youve exhausted other options, and you think an offer is the best action, you can submit Form 656L, Offer in Compromise (Doubt as to Liability). You should include a written statement explaining in detail why you believe the IRS is in error and attach supporting documentation.
Youre eligible to apply for an Offer in Compromise if you: Filed all required tax returns and made all required estimated payments. Arent in an open bankruptcy proceeding. Have a valid extension for a current year return (if applying for the current year)
A bankruptcy filing, failure to include the entire application fee, missing information, additional liabilities being accrued while the offer is being considered, and many other things may all cause your offer in compromise to be returned.

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How much will the IRS settle for? The IRS will typically only settle for what it deems you can feasibly pay. To determine this, it will take into account your assets (home, car, etc.), your income, your monthly expenses (rent, utilities, child care, etc.), your savings, and more.
A bankruptcy filing, failure to include the entire application fee, missing information, additional liabilities being accrued while the offer is being considered, and many other things may all cause your offer in compromise to be returned.
After the IRS rejects an offer in compromise, taxpayers have 30 days from the date on the rejection letter to request an appeal of the decision. To request an appeal, taxpayers file Form 13711, Request for Appeal of Offer in CompromisePDF, or mail a letter to the IRS with certain information about their situation.

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