Offer in Compromise IRS Tax Settlement

IRS Offer in Compromise Program

An Offer in Compromise is a settlement with the IRS that allows you to pay less than what you owe, and walk away from the rest. Generally, the IRS will accept a settlement through the Offer in Compromise if you can convince them that the amount you are offering is the most that they could expect to collect from you through other means.

How Much Should I Offer?

The IRS will only accept an Offer if they believe you are offering your “reasonable collection potential”. Generally, this means that your offer should include all of the equity in all of your assets plus two years of disposable income.

As your Tax Settlement Attorney, my job is to make both of these numbers as low as possible. When we present your Offer in Compromise to the IRS we will need to first evaluate your assets and show the IRS how much money you could actually receive and send to them if you were to sell everything that you own, not including personal items such as household goods and appliances.

When the IRS evaluates your income and expenses, they are going to determine your “disposable income”, which is simply your gross income minus your IRS allowed expenses.

The IRS has established maximum amounts for allowable expenses, and they will not allow more than those standards for the purposes of calculating your disposable income

Once they have determined your disposable income, they multiply that monthly amount by four years (48 months) or more and add that to the settlement figure.

As your Tax Settlement Attorney, my job is to ensure that we can present an accurate picture of your monthly finances in a way that, using the IRS’ own standards and rules, results in the lowest “disposable income” figure possible.

This is how to get a low settlement with the IRS

Do I Qualify for a Settlement?

I cannot answer this without reviewing your specific circumstances. In general, though, in order to qualify for a settlement using the Offer in Compromise you need to have very little equity in your assets (real estate, retirement accounts, etc.) and your income and expenses need to be at a level where you are having a tough time making ends meet.

If you have significant equity in your assets (enough to pay the IRS in full), or your income is above-average, an Offer in Compromise may not be an option.

The only way that I can give you a definitive answer is for you to contact me for a free consultation. We can review your assets and determine your “disposable income” figure and decide whether or not you would qualify for a settlement. I do this free of charge with absolutely no obligation.

Take the Next Step

Whatever your tax needs are big or small I invite you to call me at (303) 376-6267, complete the “Contact Me” form below, or email me at john@cotaxattorney.com