Outstanding tax debts can be extremely hard to pay off. The amount you owe can quickly grow due to penalties and interest assessed by the IRS. However, the IRS does have a number of payment options in place to help taxpayers resolve tax debt. One of these options is called an offer in compromise.
An offer in compromise is an agreement reached between a taxpayer and the IRS to settle a tax debt for less than the total amount owed. If you owe more than you can reasonably repay, you may qualify for an offer in compromise.
Qualifying for an Offer in Compromise
Not everyone qualifies for an offer in compromise. The IRS isn’t in the business of writing off tax debt in general, so if they determine that you can afford to pay via an installment agreement or other payment arrangement, they will generally not approve an application for an offer in compromise.
If, however, your tax debt is disproportionately high compared to your ability to pay, the IRS may opt to set up an offer in compromise arrangement. The logic behind this arrangement is that the IRS would rather get some of the money owed rather than getting none and/or assessing an amount of debt that the taxpayer in question will never be able to repay.
To find out more about offers in compromise or to see if you might qualify, call Taxation Solutions, Inc. today! We’re your local tax experts in Indianapolis and we’re here to help with all of your tax needs. From tax debt resolution to tax planning, Taxation Solutions, Inc. is here for you!