What is an Offer In Compromise?

An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship. We consider your unique set of facts and circumstances:

  • Ability to pay;

  • Income;

  • Expenses; and

  • Asset equity

The IRS generally approves an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time. We will investigate all other payment options before submitting an offer in compromise. The Offer in Compromise program is not for everyone.

Make sure you are eligible

Before we can consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding. During your free initial consultation with Bakersfield Tax Relief, we will assist with filing all back tax returns and make sure you are eligible for the Offer and Compromise program prior to submission to the taxing authorities.

Select a payment option

Your initial payment will vary based on your offer and the payment option you choose:

  • Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. If your offer is accepted, you will receive written confirmation. Any remaining balance due on the offer is paid in five or fewer payments.

  • Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.

If you meet the Low Income Certification guidelines, you do not have to send the application fee or the initial payment and you will not need to make monthly installments during the evaluation of your offer. See your application package for details.

Understand the process

While your offer is being evaluated:

  • Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);

  • A Notice of Federal Tax Lien may be filed;

  • Other collection activities are suspended;

  • The legal assessment and collection period is extended;

  • Make all required payments associated with your offer;

  • You are not required to make payments on an existing installment agreement; and

  • Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.

If your offer is accepted
  • You must meet all the Offer Terms listed in Section 8 of Form 656, including filing all required tax returns and making all payments;

  • Any refunds due within the calendar year in which your offer is accepted will be applied to your tax debt;

  • Federal tax liens are not released until your offer terms are satisfied; and

  • Certain offer information is available for public review at designated IRS offices.

If your offer is rejected
  • You may appeal a rejection within 30 days using Request for Appeal of Offer in Compromise

Bakersfield Tax Relief
Can Help You
  • Determine If You Are Eligible For An Offer In Compromise (OIC)

  • Assist You In Choosing A Payment Plan

  • Assist You In Negotiating An Acceptable (OIC) Offer

  • Respond To Any Offer Rejections

I would like a free 30 minute consultation to discuss if I am a candidate for an Offer In Compromise Please contact me.

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