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The Options Available to Taxpayers to Solve IRS Problems-Offer in Compromise

By Larry Weinstein, CPA | December 7, 2007

The 3rd Installment in the Series-Options Available to Taxpayers to Solve Their IRS Problems

Offer-in-Compromise

In certain limited circumstances, the IRS has the authority to settle, or compromise, federal tax liabilities by accepting less than full payment. This is what is known as an offer-in-compromise.

By making an offer-in-compromise, you agree to pay less than the full amount of the taxes owed by you. The IRS has the discretion to accept less than the full amount of taxed owed by you based upon doubt as to your liability (whether you actually owe the taxes) or based upon collectibility (you do not have the resources to pay the amount owed).

If there is no doubt about your liability or collectibility, but an exceptional circumstance exists, then the IRS may still consider an offer in compromise.

To be eligible on this basis, you must demonstrate that collection of the tax will create an economic hardship or will be unfair and inequitable.

Topics: Offer In Compromise |

One Response to “The Options Available to Taxpayers to Solve IRS Problems-Offer in Compromise”

  1. taxrelief Says:
    March 14th, 2008 at 4:25 am

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