The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.
There are many situations in life that create protracted (long) financial hardship periods. For whatever reasons, some taxpayers may decide not to file their quarterly or annual tax returns. For both unpaid Federal and state income taxes and delinquent tax returns, the mindset “If I ignore the problem long enough, it will just go away” will never work in this situation, even after your death.
The e-mail below from the IRS just arrived this morning. It describes the IRS “Offer in Compromise” program and it may benefit your friends or associates, family members, another employee at work, etc. If any person believes that the IRS will never contact them, or seek to recover those unpaid taxes, interest, penalties, etc. I disagree. President Biden is increasing the IRS budget to authorize more auditors and tax return examiners to collect the billions of dollars of unpaid, delinquent taxes. This IRS document may answer a lot of questions – https://www.irs.gov/pub/irs-pdf/f656b.pdf
If you believe that you may qualify for this program, I recommend that you contact a tax attorney who has the education, knowledge, skills, and experience to successfully obtain an approved OIC for you.
Issue Number: Tax Tip 2021-60
An Offer in Compromise May Help Some Taxpayers Settle Their Tax Bill
Individual taxpayers and business owners can use the IRS’s recently updated Offer in Compromise Booklet to learn how an offer in compromise works and decide if it could help them resolve their tax debt.
An offer in compromise is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed. An offer in compromise is an option when a taxpayer can’t pay their full tax liability. It is also an option when paying the entire tax bill would cause the taxpayer a financial hardship. The goal is a compromise that suits the best interest of both the taxpayer and the agency.
When reviewing applications, the IRS considers the taxpayer’s unique set of facts and any special circumstances affecting the taxpayer’s ability to pay as well as the taxpayer’s:
- Income
- Expenses
- Asset equity
The booklet covers everything a taxpayer needs to know about submitting an offer in compromise, including:
- Who is eligible to submit an offer
- How much it costs to apply
- How the application process works
The booklet also includes the forms that taxpayers must complete as part of the Offer in Compromise process. The current application fee is $205. However, taxpayers who meet the definition of a low-income taxpayer don’t have to pay this fee.
More information:
Offer In Compromise Pre-Qualifier tool