As American citizens we are required to pay certain monies to our government.  This money is classified as taxes.  These taxes apply to personal income, property, and businesses.  This requirement is never negotiable and is enforced stringently.  However, if you have found yourself delinquent in your debt to the IRS, there may be help in the form of an Offer in Compromise.

Obviously your best course of action is to always pay your taxes on time and to make sure all of your returns are filed by their respective due dates as well.  If, for whatever reason, you find yourself unable to meet these obligations it is in your best interest to contact the IRS immediately.  Being proactive with the IRS, can save you large penalties and interest as well as aggressive collection activities.

If you do find yourself with a delinquent tax balance, you do have options.  You can try to establish an installment plan with the IRS.  This involves making monthly payments over (typically) a five year period to pay off your debt.  Be aware that you must file all of your future returns on time or risk being in violation of the installment agreement.

Another option available to you is the Offers in Compromise.  This is a much more complex and difficult option and should include the assistance of a tax professional.

Offers in Compromise can take 1-2 years to process and get approved.  Basically you are asking the IRS to lower your total debt, including penalties and interest.  You have to prove that you are not able to pay the full debt and will not be able to in the foreseeable future.  This requires extensive documentation and official forms.  There is a $150.00 fee to even ask the IRS to consider your Offers in Compromise.

Be aware that on average only about 16% of all requests for Offers in Compromise are granted by the IRS each year.  The reality is that many are declined simply due to incomplete documentation.

The IRS expects that you will take the time and effort as well as contact a professional to assist you in getting all of your financial statements and required documentation prepared as completely and accurately as possible.

If your Offers in Compromise are accepted you will be required to file all future tax returns on time and pay all of your future taxes on time for the next 5 years.  You will also stipulate to allowing the

IRS to take all tax refunds and/or credits owed to you prior to our Offers in Compromise application.  If you do not meet these and many other requirements the IRS can revoke your Offers in Compromise and reinstate the original total tax liability.

As it is so difficult to get your Offers in Compromise granted and to abide by all of the stipulations involved, hiring a qualified tax professional to see you through the process is crucial.  Even one minor error can mean rejection of your offer.   Take advantage of the knowledge tax professionals spend years obtaining in order to assist you in working with the IRS.