Good Luck! You'll need it. The “Offer in Compromise” program is an exclusive club. It's very hard to qualify for a settlement with the IRS. The IRS wants that money. Stay one step ahead of the game. Learn the deadly mistakes that will get your offer rejected.
The Four Deadly Mistakes
Commit any of these sins and you will kill your chances of having your Offer Accepted.
1) Don't Leave Anything Out!
Fill out everything! Answer all the questions on the form. If you leave out any information, your form could be rejected.
2) List All Taxes Owed
If you owe both personal and business taxes, file two Offer forms. All liabilities must be included in the submission.
3) Changing The Form
Instant Denial! The IRS will not consider an Offer if you have altered their forms in any way.
4) Forgetting to Sign
If more than one person is submitting an Offer (like you and your spouse) you both have to sign the form.
You don't want your form to be rejected. Correct these errors before you submit your Offer. Remember, you have to pay a non-refundable 20% down payment on your offer as well as the $150 application fee. If you lose your offer, you lose that money! Also remember that 98% of offers are rejected, and you could be putting yourself at greater risk of future levies, garnishments, and seizures.
7 Keys to Success with an Offer in Compromise: Follow these key rules to increase your chances of success in the Offer in Compromise game.
- Complete the Form 656 “Is Your Offer in Compromise “Processable?’’ checklist
- Submit all required documents
- Complete all items on Form 656, Offer in Compromise
- Include all required fees and payments (20% Down payment on your offer and $150 application fee)
- Be current with all filing and paying requirements and remain current
- Respond promptly to all requests for additional information
- Complete all items on Form 433-A (for individual) or Form 433-B (for business)
Rejected? The notice will say why the offer was denied. If the Offer was too low the IRS letter will list what amount is acceptable. You can request a copy of a report listing other factors that caused rejection. Knowing this information, you can resubmit your offer after making some changes. However, it is not suggested that you do. The longer your case is being reviewed, the longer it is put on hold. This means that your debt's expiration date will be extended, leaving the IRS more time to collect on you. If your Offer is rejected, look into other tax resolutions.