What You Need To Know About The Offer In Compromise

If you are experiencing tax debt, you are not alone. Tax debt is a common problem to have for both individuals and businesses. If you have no idea how you are going to pay it off, you are again not alone. You may be starting to feel like the IRS is going to come after you any day now. You are probably looking for possible ways to resolve your tax debt issue.

At CuraDebt Tax, we have a team of tax professionals who are available to help you with all of your tax issues. We will help you find the best resolution for you, based on your financial situation.

You may have already begun researching resolution options, and you may have come across the option of an offer in compromise.

An offer in compromise is an IRS tax relief program that allows eligible financially distressed taxpayers to pay off only a percentage of their total debts owed to have their debts settled completely. An offer in compromise is a form of IRS tax relief that lets a taxpayer who would otherwise face hardships if they paid their debt in full, pay a part of their debt instead of the full amount they owe. This sounds like a great deal, but unfortunately it is not a resolution option that is available to everyone. One must qualify for an offer in compromise through financial hardship, according to the IRS standards.

The IRS considers several factors:

the applicant’s ability to pay
their level of income
the assets they own
and their expenses

This gives the IRS an idea of the income of the taxpayer about their debts and if they have the financial ability to pay off their debts without falling into economic hardship. An offer in compromise is accepted when the IRS sees that there is no other way for them to get money owed by the taxpayer in one full payment.

The IRS also takes into consideration the health of the applicant. Someone who is very ill or disabled and lives on a fixed income would most likely be unable to pay off their full debt after deducting necessary living costs.

The IRS will also consider if the applicant is on the verge of bankruptcy, if they are aged retirees, or if there was an error on the part of the IRS in estimating the value of taxes the individual or business owes.

SO HOW DO YOU QUALIFY FOR AN OFFER IN COMPROMISE?

For you to qualify for this IRS tax relief program, you need to meet specific eligibility requirements. To get a better idea of whether or not you would qualify for an offer in compromise, you will have to use the offer in compromise pre-qualifier tool. The pre-qualifier questionnaire tool asks you questions to help determine your eligibility status. Some of the answers to the questions will immediately make you ineligible.

Besides basic information, the total number of people living in your household, the exact amount you owe the IRS, and the most recent tax year that you owe for, you will also be asked if you are up to date with filing all of the required federal tax returns, and if you have made all of the essential tax payments that are estimated, and if you have submitted all federal tax deposits that are required for yourself and your employees if you are self-employed and/or an employer of labor. You will be required to fill in information about your assets.

This helps the tax offer in compromise calculator determine the current state of your finances and how much you own. You might be required to sell some of your assets to settle your tax debts.

You will also be required to fill in information on your total bank balances, your home equity values, and the value of any financial assets you own. You will be required to fill in your sources of income from your job paychecks and or dividends. After you have correctly filled in information on your assets and income, you will then be required to fill in your expenses. Expenses include things such as living costs, vehicle payments, public transportation costs, life, and health insurance payments, court-ordered payments, and child dependent care costs.

The IRS will then take all of this information and decide if you qualify for an offer in compromise.

HOW IS AN OFFER IN COMPROMISE SUM CALCULATED?

Finding the right amount to offer is important, We do not want to submit an offer that is too high or too low. To determine the offer amount we will use a reliable tax offer in compromise calculator.

To calculate the amount you can pay with an offer in compromise calculator, we subtract the value of your total assets from the total debts you owe.We take the value of your total income per month and multiply it by the number of months you have in the statute of limitations.The amount we get is multiplied by 12 of your monthly income as the IRS would prefer to get the full payment within one year. Now if the total figure you have is less than the amount of debt you owe the IRS, then you qualify for an offer in compromise.

Instead of attempting to manually calculate the value of the offer you want to propose to the IRS, We will use an offer in compromise calculator to avoid any errors. This offer in compromise calculators give you an estimate of the value of your offer amount and reduce your tax debt.

Free online offer in compromise calculators are not usually accurate, and as such, you should use a more reliable and precise offer in compromise calculator like the irs.gov offer in compromise calculator.

WHAT CAN I DO IF MY APPLICATION FOR AN OFFER IN COMPROMISE IS REJECTED?

If you do not get accepted for an offer in compromise even after filing an appeal, there are other options you can explore for you to pay off your debt to the IRS in installments.

We can help you find out if you are an eligible candidate for an offer in compromise. If you are not, we can help you find a resolution that you do qualify for. We can help you set up an installment agreement, which is a monthly plan where payments can be made at an agreed sum every month until you entirely pay off your debt.