Will The Government Accept An Offer In Compromise?

By mfishman

The government will accept an offer in compromise under two conditions. First they will accept the offer if they believe there is no reasonable way to collect the entire amount of the debt. This takes careful review of your finances, assets and circumstances. The second reason they will accept an offer in compromise is if they feel that the offer is fair and not a way of paying less taxes. For example if you have 2000 dollars available and you offer to pay this on a 3000 dollar tax debt, chances are they will accept. However, if that tax debt is 12,000 dollars, chances are they are going to negotiate for a higher amount. On rare occasions, the government will accept an offer of compromise under the clause of “doubt of liability”. This clause states that the determination of whose actual debt the tax belongs to may not be clear, so they accept a lower payment to resolve the case.

Does An Offer Of Compromise Cost Anything?

An offer of compromise must be made to the government in writing using the appropriate tax forms. With this offer a 150 dollar fee for processing must be included. If a cash settlement is offered, 20% of the value of that cash settlement must be included with the application. If a payment arrangement is being offered, the first installment must be included with the offer and the application fee. Any application that is received without either of these forms of payment will automatically be denied.



Is There Anything I Must Do Before Applying For An offer Of Compromise?

You must have all your tax forms filed with the government, including any forms that were the cause of the taxes being due. If you are in business you must make sure that all your employment tax forms have been filled and that all your quarterly taxes are up to date. You must also make sure that any taxes that are coming due are paid on time and with the proper forms. Once you have established an offer of compromise the government will be very strict with any new tax liabilities.

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  3. How Can I Settle MY Government Tax Debt?
  4. How Can I Settle For Less With The Government For Back Taxes?
  5. What Will The Government Do In Order To Get Payment For Back Taxes?