Offer in Compromise Services | S.H. Block Tax Services
Are you struggling to pay off your tax debt? There may be alternative IRS collection options available to you, including an offer in compromise (OIC). With an OIC, the IRS agrees to accept less than the full amount of tax debt you owe. However, not everyone will qualify for an OIC.
At S.H. Block Tax Services, our experienced tax experts can help determine whether you’re eligible for IRS collection alternatives and investigate whether your tax debt is fair and accurate. Call us today at 410-793-1231 and schedule a consultation. Or, keep reading to learn more about the Offer in Compromise program.
Who Can Request an Offer in Compromise?
The IRS will only agree to accept an offer in compromise in one of several scenarios:
- Doubt as to Collectability: You don’t have enough assets or income to pay off your tax debts in a reasonable amount of time.
- Doubt as to Liability: You can convincingly argue that the IRS made a mistake when they calculated your tax liability.
- Effective Tax Administration: You technically have enough assets or income to pay your tax liability, but doing so would cause economic hardship.
Other Terms and Conditions
If your situation falls any of the three major criteria we’ve listed, you’ll still need to meet the following additional criteria before you can receive an OIC.
- You must file all your returns
- You must be current with payments and withholdings
- You may be required to pay an application fee
- You must include an initial payment with your offer
- Your debt cannot have been confirmed or established by a final court decision
- You cannot be filing for bankruptcy
How to Check Whether You Qualify
The IRS has a useful tool to check whether you qualify for an offer in compromise. You can check your eligibility now. If you have any questions or concerns about your eligibility, contact our tax experts today.
Note that even if you meet all the criteria listed and the IRS tool says you’re eligible, this doesn’t guarantee the IRS will accept your offer — it only means you’re eligible to apply.
Reduce Your Tax Liability With an OIC
If you qualify to apply for an offer in compromise, you’ll submit a payment with the offer application. The IRS provides a complete Form 656 booklet to help you apply for an offer in compromise. The first payment is typically around 20% of the total offer amount.
Next, the IRS will review your OIC application. Typically, it will ask for more information and additional time to assess your request. Eventually, the IRS will either grant or deny your OIC. Until you’ve finalized your OIC, you’ll need to file your taxes on time, pay in full, and make any necessary estimated payments.
If the IRS rejects your offer, the payment you made will go towards your tax liability. However, you may still appeal the rejection or explore other collection alternatives.