page contents
  • dave rosa

What You Need to Know About Offer in Compromise

Updated: Aug 22


Coast to Coast - IRS Help

IRS Tax Relief - Fresh Start Program

Everything To Know Regarding An Offer in Compromise

Are you qualified to settle with the IRS. Find out.
Offer in Compromise - Tax Settlement

Federal income taxes are unavoidable. You pay taxes on your income, your bank account interest, investment account earnings, some types of forgiven student loans, and loads of other assets and wealth.

Many Taxpayers cannot afford the taxes they owe, so they end up with an unpaid tax liability. If you’re facing a tax debt you can’t pay back, you may qualify for a tax relief program that lets you pay back only part of what you owe. This tax relief program is called an Offer in Compromise.

Below, we’ll explain more about Offer in Compromise, who qualifies, and why student loan borrowers should know about it. What is an Offer in Compromise?

The Offer in Compromise (OIC) program is run by the agency. The IRS permits an eligible taxpayer to negotiate a settlement for unpaid tax debt. The IRS lets qualified individuals pay less than what they owe in taxes, and in return, the IRS considers it paid-in-full.

This tax debt forgiveness program offers borrowers reprieve from tax debts that are often far out of proportion with their income.

FOR MORE OFFER in COMPROMISE INFO CLICK HERE: #OfferinCompromise. What is Unpaid Tax Debt?

Tax debt is taxes you owe the IRS after the filing deadline has passed. You might make a partial payment when you file, but if you don’t pay the full amount before the deadline passes, the amount left over is your tax debt.

Sometimes you have tax debt accidentally because you forgot to send in your final payment. In other cases, you might have tax debt because you knowingly did not or could not pay what you owe.

A few circumstances that can leave people with an unexpected tax bill they cannot afford include:

1. You had federal student loans forgiven and owe taxes on the amount forgiven.

2. Your employer wasn’t withholding the correct amount of your paycheck.

3. You’re self-employed and forgot to withhold taxes or didn’t do it correctly.

4. You took credits, exemptions, or deductions that you weren’t qualified to claim. How an Offer in Compromise Can Dramatically Reduce Your Tax Liability.

Anyone with an unpaid tax debt can apply for an Offer in Compromise, but for your best shot at success, you should follow these steps: 1. You Must File Your Missing Tax Returns Going Back 6 Years. 2. Check To See If You Are Qualified and Eligible To Settle. 3. The IRS Has a Pre-Qualifier Assessment That Can Be Accessed. (OIC pre-qualifier tool

Do You Submit the Application Yourself or Do You Use a Tax Professional? Yes, you can always submit a "do it yourself" Offer in Compromise, but know this, your chances of success are dramatically decreased. The number one reason why the IRS rejects an Offer in Compromise submission is because the taxpayer doesn't know what they are doing.

For example, the tax professionals at Flat Fee Tax Relief have a 96% success rate. On the other hand the IRS has traditionally approved 42% of the OIC's received. That's a big difference. An Offer in Compromise is much to complicated and too important for a novice to attempt. What Does an Offer in Compromise Have to Do With Student Loans?

After 20 to 25 years on an income-based repayment plan, federal student loan borrowers are eligible to have their qualifying federal student loans forgiven.

Unfortunately, that doesn’t mean you’re free and clear. Under current rules, the forgiven amount is seen as taxable income by the IRS. The borrower must pay income taxes on the forgiven amount the same way they pay taxes on money earned at work. A 1099 will be generated and the "forgiveness" will be shown as regular income. The very same thing happens when a regular debt is settled/forgiven or a home is foreclosed.

This article is provided by the tax professionals at Flat Fee Tax Relief who have been providing valuable tax debt help at a very affordable fee for more than a decade.

Our teams are strategically located in Clearwater, Florida, and San Diego, California. This allows for service from coast to coast. Our hours of service is from 8 A.M. Eastern to 6 P.M. Pacific time. This is a tremendous advantage when having an IRS levy stopped and released in one day.


CALL 1-866-747-7435



7 views0 comments