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An Offer in Compromise is a legal agreement between a taxpayer and the IRS that settles tax debt for less than whats owed. To qualify, you must meet one of these conditions: Doubt as to Collectibility: Your income and assets are insufficient to pay the debt within the given timeframe.
Many offers in compromise applications are returned because they are incomplete. The IRS cannot process an offer if it is missing elements specific to applications and related documentation.
Exceptional Circumstances The IRS considers the following factors to decide whether a compromise would undermine taxpayer compliance with tax laws: The taxpayers history of compliance with filing and payment obligations required by the tax code. Taxpayers deliberate tax avoidance efforts.
Use Form 656 when applying for an offer in compromise (OIC), which is an agreement between you and the IRS that settles your tax liabilities for less than the full amount that you owe.
The resulting amount is your monthly disposable income. Take that number and multiply by 12 (which is equal to one year worth of disposable income). This is the bare minimum you can offer to the IRS. They will almost never accept less than this amount.
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People often complain that they should not file an Offer in Compromise for a client because the acceptance rate is only 36%. This percentage rate has been consistent for years (+/- 5%).
The IRS ultimately determines whether you qualify for debt forgiveness. However, the agency generally considers taxpayers who meet these criteria: a total tax debt balance of $50,000 or less, and a total income below $100,000 for individuals (or $200,000 for married couples). Need to talk to a tax relief specialist?
We generally approve an offer in compromise when the amount you offer represents the most we can expect to collect within a reasonable period of time. Explore all other payment options before you submit an offer in compromise.

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