Offer in Compromise
An Offer in Compromise is the process IRS offers taxpayers to settle their tax debt for less than what they owe. However, the Offer amount is based on a strict calculation based upon your income, allowable expenses and equity in assets. Don’t be fooled by those misleading TV or radio commercials that claim they can settle your tax debt for pennies on the dollar.
There are two types of Offers that you can submit to IRS. The first option is called the Lump Sum Cash Offer. If you select this option you must pay the filing fee to IRS, 20% of the Offer amount and if the Offer is accepted you have 5 months to pay the remaining balance. The other type of Offer you can submit is called the Periodic Payment option. If you select this option you must pay the filing fee to IRS and make monthly payments while the Offer is being reviewed. The Pless Law Firm, P.A. can determine if you are eligible to file an Offer and if you are eligible we can help you decide which Offer is the right option for you.
If the total amount of your tax liabilities is less than $50,000 the general time frame for IRS to review your Offer in Compromise is 6-12 months. If your tax liability is $50,000 or more IRS Counsel must also review the Offer in Compromise. This means the review process can take more than 12 months. While the Offer in Compromise is pending IRS cannot take enforced collection action against you. However, this also means that the collection statute is not running. AnnaMarie L. Mitchell, P.A. can guide you through the process to help you end your tax nightmare.