Offers-in-Compromise and Tax Compliance Requirements

Services for Real Estate Pros with Backoffice Squared

I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. An Offer-in-Compromise can be a great technique for clearing an IRS debt for less than the total due. But many times, these offers are rejected by the IRS because the taxpayer is not currently in “Tax Compliance.”

What does the IRS consider to be Tax Compliance? It’s two basic factors:

  1.       Has the taxpayer filled all their required tax returns for the last 6 years, and
  2.       Is the taxpayer up to date with his or her current year tax payments,

Producing an Offer-in-Compromise can have a considerable cost that starts in the $5,000 range. The taxpayer is required to report a great deal of financial information about their income and assets they currently own. Having an Offer-in-Compromise rejected after going through all that work because a tax return has not been filed or the current year estimated tax payments have not been made is a huge blunder. It shows a lack of basic preparation.

The way to avoid this blunder is to always get the IRS Tax Transcripts. These reports show when tax returns and payments have been made. Dealing with the IRS can be a pain, but getting these reports is step one in the planning phase for making a successful Offer-in-Compromise.

If you or someone you know has received a Notice of Intent to Levy or some other federal or state tax issue, please feel free to contact me at either (352) 317-5692 or email


Jim Payne, CPA


Gainesville, FL

Cell (352) 317-5692

Office (352) 376-9401

Fax (352) 376-9440



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Jim Payne, CPA

CPA firm practicing in the area of IRS Collections
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