Dealing with overwhelming tax debt is never easy. Thankfully, there are options available to help you get rid of tax debt, such as an offer in compromise. An offer in compromise is a payment option offered by the IRS for taxpayers who can’t pay their tax liability in full because it could result in financial hardship.
If you are considering an offer in compromise, you likely have countless questions. This is why our team at Law Offices of Darrin T. Mish, P.A. has put together answers to the most common questions asked about an offer in compromise.
#1: Do I qualify for an offer in compromise?
You may qualify for an offer in compromise if you can prove to the IRS that you will have financial hardship if you pay your entire tax debt. To prove this, the IRS will review your income, expenses, ability to pay, and asset equity. You must also be able to offer a payment that represents the most you can pay in a reasonable period of time. If the IRS approves your offer in compromise, your tax debt will be reduced.
#2: Is there a way to know if I qualify ahead of time?
Yes, you can use the IRS Offer In Compromise Pre-Qualifier to determine if an offer in compromise is right for you.
#3: Can I apply for an offer in compromise if I have installment agreements?
Yes, you can still apply for an offer in compromise if you have installment agreements. Once you’ve submitted your application, you can stop making installment agreement payments until the IRS makes a decision on the offer in compromise request.
#4: Can the lien or levy on my account be lifted?
The lien on your account will be lifted if your offer in compromise is approved by the IRS. However, the IRS is not required to release the levy made on your account if it was served before you applied for an offer in compromise.
#5: Can I file for an offer in compromise if I am in bankruptcy proceedings?
Unfortunately, no. You cannot apply for an offer in compromise if you have already filed for bankruptcy. Once your bankruptcy is discharged, you may apply.
Have more questions about an IRS offer in compromise? Contact us today at (813) 295-7648 to schedule a consultation!