I received the following e-mail yesterday:
I'm going to file a Chapter 7 in the next few weeks (real estate issues). IRS debt to new (2008/2009)and doesn't qualify for discharge. Is an offer in compromise my only option and what are income requirements for successful Offer...Thanks.
I receive a lot of questions about Offer in Compromise "Income Requirements". This is the answer:
- First, it's incredibly difficult to settle your tax debt with an offer in compromise, I've said it before and I'll continue to say it.
- There are no income requirements per se. The IRS calculates your ability to repay the tax debt before the statute of limitations on the debt (10 years) has expired.
- This means even if you are facing tough financial times and have filed for bankruptcy, the IRS will still look to the future at your recovery and your ability to repay them in years to come.
Yes, it's a trap! But there could be a chance for you to be approved for this plan or similar plans. You have to really analyze your situation. What is your financial situation? Why are you unable to pay the IRS? Why should the IRS allow you to settle your debt?