Step-by-Step Guide to Filing for IRS
Offer in Compromise
By Nick Nemeth
Law Offices of Nick Nemeth, PLLC
Dallas, Texas
A
ccording to a latest estimate
from the IRS, the government
loses around $458 billion dollars
in unpaid taxes every year. Many
delinquent taxpayers who owe the IRS
huge amounts in unpaid taxes, whether
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individuals or corporations, are not
always in a sound financial condition.
Apart from using tax enforcement
efforts such as audits to recover the
money, the IRS also helps delinquent
taxpayers mitigate financial hardships
through programs such as the Offer
in Compromise. The IRS Offer in
Compromise is basically an agreement
between the taxpayer and IRS to settle
outstanding debts in exchange for
an amount that is lower than what is
owed. Though the program is effective
in slashing a significant portion of
outstanding debts, taxpayers need
to approach the application process
correctly to increase their chances of
success.
The article is a step-by-step guide to
filing for an IRS Offer in Compromise.
Summer 2017
1. Gather Personal and Financial
Information
Filing an Offer in Compromise is meant
to eliminate outstanding tax debts.
The IRS does not accept any random
amounts when settling outstanding
debts, such as “pennies for dollars”, and
assesses a number of factors before
they approve or decline an OIC claim.
Calculating a reasonable offer amount
is therefore, the first step to pacify the
IRS into accepting your OIC. For that to
happen, you need to gather essential
personal and financial details such as
investments, available credit, assets,
income, gross income, and expense
report for the IRS to accurately evaluate
your offer. When you calculate the offer
amount, keep in mind that college
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