Settle down! So you’ve fallen behind on your taxes. Now comes the time to resolve the issue. After talking to a reliable tax professional, you’ve determined that the Offer in Compromise Program is best for you. But there may be some things about the program you aren’t entirely sure about. If you have some questions about the program that are making you hesitate, don’t follow through without knowing all the facts!
Slim Chances…Some tax resolution firms will tell you that you qualify for an Offer in Compromise, even if you don’t. That’s why the IRS rejects 83% of submitted Offer in Compromise cases; because the companies submitting them don’t know what they’re doing. But if you truly feel like you qualify for the program, do a little research and make sure. Then when you’re positive you can qualify, read up on the stipulations to the program:
Time Freeze! When you submit an Offer in Compromise, your statute of limitations is put on hold. If you don’t know, your statute of limitations is the time the IRS has to collect their money from you. For federal debt, the IRS has ten years to collect monies owed. So if the IRS spends a year reviewing your case and then rejects it, your time picks up right where it left off. This is another reason to be sure that you can qualify before you submit the forms.
Five Year Agreement…If you are accepted in the Offer in Compromise Program and are able to settle your debt for much less than you actually owe, the IRS requires that you go into a five year agreement with them. That means that for the next five years you must file on time every year, and pay anything owed on time each year. For those in the plan, it’s usually worth it. But if you aren’t prepared for that kind of commitment, that’s something to consider when thinking about an Offer.
Good News: While the things above may seem a little scary, they are important to take into consideration. If you’re serious about settling your tax debt, and you qualify for the Offer in Compromise Program, it can be a wonderful way for you to kiss your debt goodbye!
Now you have the smoking gun…Use it!