An offer in compromise is a potential tax resolution for people who owe the Internal Revenue Service (IRS) more money than they can afford to pay. If approved, the IRS accepts a lesser amount to settle your debt. However, it isn’t always easy to gain approval due to its strict criteria. At Roberts Tax Service, we work with you to understand this option and increase your chances of approval. The IRS considers your income, assets, expenses, ability to pay, and whether paying the full amount would cause financial hardship.
Information You Need to Submit an Application for an Offer in Compromise
It’s important to remember that the IRS wants its money and will only approve an offer in compromise if it thinks it wouldn’t receive any money otherwise. You must be current with all filing and payment requirements to apply. Additionally, you cannot be in the process of filing bankruptcy.
After supplying the IRS with your name, address, social security number, and amount of tax debt you would like it to consider for this program, you need to supply details about your income, assets, and expenses. In addition to wages, your personal income can include:
- Business profit
- Self-employment income
- Rental income
- Child support or alimony
- Interest on investments
Your assets can include things such as:
- Stocks and bonds
- Resale value of your personal vehicles
- Market value of your home
- Balance of your retirement savings accounts
- Balance of bank accounts, including checking, savings, and investment
For the expense section, you should only include items you pay regularly. These may include:
- Rent or mortgage
- Child support or alimony
- State and federal taxes
- Daycare costs
- Costs to maintain a vehicle
- Auto, health, and life insurance
Compiling this information and completing the application correctly can be challenging. You run the risk of getting denied if you don’t do it right. Please contact us to learn more about applying to the IRS for an offer in compromise.
