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Can An Offer In Compromise Really Be That Difficult to Submit?

By
Education & Training with BOOKKEEPING-RESULTS, LLC

With the latest statistics of only 31% in 2021 of Offer In Compromise applications were accepted out of over 49,000 submissions, it's not an easy task. There are no actual numbers as to how much is discounted, let alone whether they are lost ue to failure to adhere to the rules such as making sure their taxes are paid and filed on time.

All Tax Returns Must Be Filed and Accepted by the IRS

For an Offer In Compromise to be considered, you need to have your personal tax returns, and if this is for a business, the same goes for it. If you are a shareholder and/or partner, the Offer In Compromise must have also your K-1 or 1099-DIV Forms for business shareholders filed with your Form 1040s. This will also be taken into account with your Offer In Compromise application.

A Substitute For Return or SFR should be revised with an actual tax return with deductions before your Offer In Compromise application is completed, because it will affect your total tax liability in the end and hopefully help lower it. A tax transcript should be retrieved to determine what tax years you have liabilities you’re seeking to consolidate, as well as any years that you’re missing and any potential outstanding issues that may impede your Offer In Compromise application before starting your process.

Past due unfiled tax returns should still be submitted directly to the appropriate IRS tax filing center. However, if they were completed in less than 12 weeks of the process, then a COPY of the tax return must be accompanied with the Offer In Compromise application.

Process Length

The Offer In Compromise process can take upwards of 24 months, with correspondence reverting back and forth with deadlines to be met, and failure to do so can suspend or discontinue your application process completely. This is why it’s important to contact a tax resolution associate with Bookkeeping-Results, LLC if you’re interested in learning if you’re eligible for an Offer In Compromise to be considered.