Offer In Compromise
An Offer In Compromise With The IRS Settles Your Debt For "Pennies On The Dollar"
The “Pennies On The Dollar” Claim Is True, But If And Only If You Are Eligible
While watching late night television you probably have seen commercials claiming you can settle your debt with the IRS for less than the full amount you owe with their Offer in Compromise program. This is true, but it is not the whole story. Some companies that advertise these late night commercials give the impression that an Offer In Compromise is at the taxpayer’s discretion. Many of these companies “sell” the Offer In Compromise program to unsuspecting taxpayers, already in debt, yet these offers have almost zero possibility of being accepted by the IRS. The Offer In Compromise must be accepted by the IRS based on a thorough analysis of your financial position at that moment in time. When a resolution firm says they will submit an Offer in Compromise for you without doing a complete and thorough financial analysis, you are being scammed.
The IRS Wants You Back In The System
The IRS wants to get you, the taxpayer, back “into the system” as a current and future model taxpayer. IRS Code states: “We will accept an Offer in Compromise when it is unlikely that we can collect the full amount owed and the amount you offer reasonably reflects the collection potential…” (Internal Revenue Code section 7122). Many times the IRS will accept what they can to give you a fresh start to move forward.
Not only will your taxes be paid off at a tremendous discount, but so will your penalties and interest. There is no preset bottom limit that the IRS will accept to settle your debt especially if your offer is done correctly.
When done correctly your debt may be settled for only 5-15% of what you presently owe. The key is to determine the least amount that the IRS will accept from you before you make the offer. This determination is done solely with a thorough financial analysis to determine your reasonable collection potential (RCP).
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