Offer in Compromise

An offer in compromise occurs when the taxpayer has an outstanding balance with the IRS and needs a tax attorney to represent them on their behalf. The rate of acceptance from the IRS depends a great deal on the skill of the tax attorney that you choose. According to the IRS. offers in compromise surround a few different factors in whether the IRS will accept such a negotiation about the amount owed by the taxpayer. Some of these factors include income, current life situation, expenses, the ability to pay, and the assets that one owns.

Reasonable Collection Potential

Some of the above references regarding income, expenses, and mainly assets make up the reasonable collection potential. This reasonable collection potential is how the IRS determines whether they will accept an offer to compromise the outstanding debt owed. Typically, this amount should be greater than the amount owed for the IRS to accept the offer.

Eligibility

When it comes to eligibility, if you have not filed all required tax returns or made estimated payments toward the outstanding debt owed, then eligibility for an offer and compromise will be limited. Additional factors may be bankruptcy proceedings and whether the person attempting to make an offer in compromise is a 1099 self-employed or is a W-2 employed person.

Forms for Filing         

The forms your tax attorney files on your behalf to the IRS are 656, 433A, and or 433B. Form 656 is used to determine the tax liabilities. In contrast, the latter two are used for submitting in filing financial statements necessary to the offer in compromise.

Michael Brady Lynch Firm

Here at the Michael Brady Lynch Firm, we are dedicated to resolving these negotiations for clients with the IRS. We are intent on getting the best possible outcome for the client regarding the circumstances of the offer in compromise.

If there are any questions, please give us a call at 888-585-5970 or contact us today.