Is an Offer in Compromise The Right Solution?
An Offer in Compromise It is essentially a compromise reached by both parties that suit both the IRS and the taxpayer.
It’s a win-win since it offers the taxpayer a chance to get rid of their tax debt and start on a new path of financial freedom and Uncle Sam gets his money. The offer presented by the taxpayer depends on the level of their ability (or lack thereof) to pay off their debt.
With that said, submitting an application for an Offer in Compromise doesn’t automatically mean that it will be accepted. The IRS has to do its due diligence to ascertain whether your existing circumstances deem you incapable of settling what you owe in taxes.
It looks into your current income, expenses, any assets you own and any future earning potential you may have before an offer can be accepted. You’ll have to explicitly define what your financial situation is and back it up with verifiable proof.
This would be in the form of documentation and any other information that you believe might be an asset to your application. The process begins by determining whether you are a suitable candidate for the offer.