I focus my practice on tax resolution, representing taxpayers in Colorado, Florida, Texas, New York, California and elsewhere. If you can't full pay under an installment agreement, you may apply for an Offer in Compromise (OIC).
An OIC is an agreement between a taxpayer and the IRS that resolves a taxpayer's tax liability by payment of an agreed upon reduced amount. Before an offer can be considered, you must have filed all tax returns, have received a bill for at least one tax debt included on the offer, made all required estimated tax payments for the current year, and made all required federal tax deposits for the current quarter and the two preceding quarters if the taxpayer is a business owner with employees. Taxpayers in an open bankruptcy proceeding aren't eligible.
To apply for an OIC, taxpayers must complete and submit form 656 along with form 433-A or 433-B (whichever applies), the application fee, and initial offer payment. Taxpayers should be aware that submitting an OIC does not stop the accrual of interest and penalties, and the OIC process may take several months to complete. If approved, taxpayers will be responsible for making monthly payments as agreed upon in the OIC.
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