The IRS Offer in Compromise Process
At our office in Orange County, CA we help clients with their back taxes, and understanding the IRS offer in compromise process to ensure a successful offer. As you can imagine, the process to settle your tax debt with the IRS for less than you owe through the IRS offer in compromise takes time and there are certain steps you have to take. The following is the process to obtain an IRS offer in compromise:
- Making current tax payments - The IRS will never settle back taxes, knowing that you are going to continue to owe after the settlement is done. Therefore, the IRS wants you to be making payments toward your current years taxes before they would even consider a tax settlement.
- Getting Tax Compliant – This means you have to file all necessary missing tax returns with the IRS.
- Filing the Offer – To file the IRS offer in compromise, individuals will need to submit an IRS form 433-A (OIC) and IRS Form 656. Along with those forms you will need to submit recent bank statements and recent income stubs or statements.
- Wait – As with any government agency things take time, and the IRS offer in compromise is no different. From the date you file the offer to the date you get in contact with the offer examiner will be anywhere from 9 months to 2 years. During this time, you have to be sure to file your tax returns and make your current tax payments.
- Respond to IRS Offer Examiner’s Requests – Usually the offer examiners will request updated income stubs or statements and banks statements, and ask if there have been any changes to your situation. Have you moved, married, etc.?
- Accept the offer and pay according to the terms! Hopefully by this time you are one of the lucky few to get an IRS Offer accepted. Be sure to make the payments according to the terms either on the IRS form 656, or what was agreed upon between you and the offer examiner.
- File an pay your taxes on time for the next five years – The IRS will revoke your offer if you miss any tax returns or don’t pay any taxes owed by April 15th.
The IRS offer in compromise can be a great way to get a fresh start with your tax debt. Knowing the full process is a must to be sure you know what to expect.
At our office in Orange County, CA we first start by seeing if you first even qualify for the IRS Offer in Compromise. We don’t want to start this whole process unless we know that you have a great chance at obtaining a tax settlement with the IRS. You can check out our video that explains further how to qualify for the IRS offer in compromise.
If you would like some help with an IRS offer in compromise, be sure to give our office a call.
4630 Campus Dr #203
Newport Beach, CA 92660