The offer in compromise program is offered by the IRS. An offer in compromise allows individuals to settle their tax debts for less than the full amount owed, based on their ability to pay, income, expenses, and asset equity.
To be eligible for an offer in compromise, individuals must meet certain requirements, such as filing all required tax returns, making estimated payments, not being involved in an open bankruptcy proceeding, and meeting tax deposit obligations if they are an employer.
If the IRS is unable to process an offer in compromise, the application and offer application fees will be returned, and any offer payments included will be applied to the outstanding balance. There are different payment options available, including a lump sum cash payment or periodic payments.
Low-income individuals who meet the certification guidelines do not need to submit an application fee, initial payment, or make monthly installments while the IRS reviews the offer.
If an offer in compromise is rejected, individuals have the right to appeal the decision within 30 days using the Request for Appeal of Offer in Compromise, Form 13711. The IRS Independent Office of Appeals provides additional assistance in the appeals process.
It is important to note that the offer in compromise process can be complex, and seeking the guidance of a qualified tax professional, such as a tax attorney or enrolled agent, is recommended to navigate the requirements and increase the chances of a successful outcome.