Eligibility starts with the facts
An offer analysis generally considers tax compliance, income, allowable expenses, assets, equity and the IRS collection potential. The correct strategy depends on the taxpayer's actual financial circumstances.
Financial documentation matters
- Income documentation and business earnings when applicable.
- Bank and investment accounts.
- Vehicles, real estate and other assets.
- Monthly living expenses and supporting records.
- Loans, secured debts and other relevant liabilities.
Compare the alternatives
Before submitting an offer, it is useful to compare the likely offer result with installment agreements and other collection alternatives. An offer can require substantial documentation and ongoing compliance.
No guaranteed settlement percentage
Be cautious of advertising that promises a specific settlement amount without reviewing your finances. The IRS evaluates offers under program rules and the facts of each case.
Frequently asked questions
Does the IRS really settle tax debt for less?
Yes, qualifying taxpayers may receive an accepted Offer in Compromise, but acceptance depends on eligibility and the financial and procedural facts.
How is an offer amount determined?
The analysis can include income, allowable expenses, assets and equity, among other factors under IRS rules.
Should I file an offer just because I owe a large amount?
Not necessarily. The amount owed alone does not determine eligibility; a financial analysis should be completed first.