Helpful Tips for Filing an Offer in Compromise With The IRS

If you can't pay your full tax liability, or doing so would create a financial hardship, you might consider applying for an Offer in Compromise. In doing so, the IRS considers your: 1) ability to pay; 2) income; 3) expenses; and 4) asset equity. You can find more information here.

When filing an Offer In Compromise (OIC), keep the following helpful tips in mind:

  1. Be sure you fill the form out correctly-- When filling out the form, be absolutely certain that you fill out all of the applicable information. The IRS can reject your offer for simply not being filled out properly.
  2. Be completely truthful-- the IRS is in the position to investigate, and smoke out, fraud and untruthfulness. Additionally, being honest means that you will not have to deal with any potential fraud accusations or charges.
  3. Be sure to fill out financial statements completely-- similar to the OIC form itself, if your financial statements are not completely filled out, the IRS may reject your OIC.
  4. Provide all documentation-- make sure that you you provide every listed figure with a check and invoice to prove it is an actual expense. The IRS is incredibly thorough, so be sure that you have your documentation in order.
  5. Make sure your tax returns are up to date-- you must be current on all of your tax obligations, such as having your returns filed, you cannot be in violation of any provisions of the tax code, etc. Otherwise your OIC will not be considered.

For additional information regarding how to proceed with your OIC, or for any other Taxation issue, be sure to contact a Taxation Attorney.

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