Our new website is optimized for the most current web browsing technology. If you are using an older web browser, part of our website may not function properly as designed. Please consider upgrading your browser for an error free experience.
At Solvable, we care about your financial well-being and are here to help. Our research, articles and ratings, and assessments are based on strict editorial integrity. Our company gets compensated by partners who appear on our website. Here is how we get compensated.
At Solvable, we care about your financial well-being and are here to help. Our research, articles and ratings, and assessments are based on strict editorial integrity. Our company gets compensated by partners who appear on our website. Here
You might be able to pay fewer taxes than you owe through an offer in compromise with the IRS.
You might be eligible for an offer in compromise if you can prove there’s a mistake on your taxes, you cannot feasibly pay the full amount you owe, or paying off the full amount would cause you significant financial hardship.
An offer in compromise attorney can help you through the process by properly handling all the necessary paperwork, communicating with the IRS, reducing the time and stress placed on you, and giving you guidance and peace of mind.
Do you owe tax debt? Don’t panic. The Internal Revenue Service (IRS) has options for individuals struggling to pay off their full debt. One of these is an offer in compromise. Read on to find out if you qualify for an offer in compromise and how an attorney can help you navigate this situation successfully.
What Is an Offer in Compromise?
If you need to settle your tax debt with the IRS, you might be eligible for an offer in compromise. This program allows qualified individuals to pay back fewer taxes than they actually owe. You’re essentially “offering” to pay back past tax debt for a specified lower dollar amount. If you pay back this agreed-upon amount, the IRS considers your tax debt to be paid off in full, and you can get back on your way to good standing. The IRS will also halt collection actions such as tax levies while you’re going through offer in compromise negotiations.
Do You Qualify for an Offer in Compromise?
To qualify for an offer in compromise, you must prove to the IRS you’re legitimately unable to pay the full amount of taxes you owe. This could be due, for instance, to unforeseen health issues or major life changes. If you simply didn’t file your taxes or were avoiding paying them, however, you’re probably not going to receive much sympathy from the IRS. You must also be up-to-date on all your tax filings and cannot be going through the bankruptcy process.
There are three main scenarios IRS considers when deciding whether a taxpayer qualifies for an offer in compromise:
Doubt as to liability. Say, for instance, you, your accountant, or the IRS itself made a mistake on the amount of taxes you owe. In this case, you should not legally be liable for paying that amount. To dispute your tax debt, you must fill out and submit Form 656-L to the IRS. The IRS will look into the issue, collect the appropriate documents from you, and if a mistake has been made, allow you to pay off only the amount of taxes you actually owe.
Doubt as to collectibility. If you don’t make enough money or have enough assets to pay your full debt, the IRS might settle for what it can realistically collect. This is the best case scenario in this situation for both you and the IRS.
Effective tax administration. If you do have the income and assets to pay off your tax debt, but it would cause you significant hardship, the IRS might choose to grant you an offer in compromise over leaving you in financial ruin. After all, how will the IRS continue to be able to collect tax from you down the line? To request an offer in compromise for either this reason or doubt as to collectibility, fill out and submit the Form 656 Booklet.
After investigating your claim, the IRS will use its “reasonable collection potential” formula and guidelines to estimate what amount of your tax debt you can afford to pay based on your financial situation. This entire process, however, can take a long time — up to two years. If two years have passed, and the IRS has still not decided whether to grant you an offer in compromise, you will receive it automatically.
Just remember that if the IRS accepts your offer, you must be financially prepared to make the agreed-upon debt settlement payments either in one lump sum or in smaller monthly payments over a set time. If the IRS rejects your offer in compromise, you can appeal its decision within 30 days by submitting Form 13711. You must hire an attorney to proceed with this step in the Court of Appeals.
How Can an Attorney Help?
Aside from the aforementioned appeals scenario, in which you must have a lawyer, you might also want to hire an offer in compromise attorney to help you through the IRS negotiations and investigation. There are several benefits of working with an attorney:
To submit an offer in compromise, you must file all your tax documents and make sure they’re up to date. A tax attorney can help you through this process and communicate with the IRS more effectively than you might be able to yourself. He or she can also help you fill out all the necessary forms properly.
The tax code is complicated. Attorneys who work in this field, however, understand the ins and outs and can handle all the details for you. This helps you avoid making mistakes, might expedite the process, and gives you more peace of mind.
During the investigation process, the IRS might need to interview you and gather any relevant documents, such as medical records. An offer in compromise attorney can direct all communications through his or her office and take care of all the paperwork. This assistance can be a great stress relief, particularly if your reason for requesting an offer in compromise is health-related.
If time is tight — if you work long or unusual hours or care for children all day — an attorney can help you handle your tax debt while you handle life.
Take the first step toward becoming tax-debt-free by contacting us to learn about your repayment options. If you’re a good candidate for an offer in compromise, one of our qualified and professional attorneys can help guide you through the process as smoothly and stress-free as possible.
Solvable is a for-profit company that helps customers resolve their tax problems, but a free service for consumers. Partners cannot pay us to guarantee favorable editorial reviews or ratings. We do not publish favorable (or unfavorable) editorial reviews or assessments at the direction of an advertiser or partner. We always work to put consumers first and do our best to provide value in meaningful ways, but our reviews are subjective.
How We Make Money
Solvable is compensated by some of the companies seen on our website. Most often, Solvable receives fees when one of our readers clicks, fills out a form, applies for, or receives a financial product from one of our partners. We also earn fees for capturing consumer stories and writing about them, displaying advertising, having our partners sponsor certain parts of the site, and writing content that may be relevant to our partner and their audience. This compensation may impact where products appear on this site, including article pages, comparison listings, the order in which they appear or if they will even appear on a given page, and our matching recommendations. Solvable has not written about, reviewed, or rated all financial products available to consumers.
In addition, we may be compensated in the following ways:
Referrals to consumers who use the online form or locator line that may provide expert answers to questions;
Marketing tax resolution, tax preparation, tax audit help and general tax assistance.
Referrals to services that help consumers with tax resolution, tax preparation, tax audit help and other tax issues.
We do recommend that you shop around and compare services and costs with other companies while performing your own due diligence, especially since people’s experiences with companies can change over time.
Free Solvable Services
The offers that you are matched up with are from companies or attorneys/law firms that we may receive compensation from. Based on our initial review of such companies or individuals, we feel comfortable introducing them to our readers. We won’t recommend something just because we’re offered payment to endorse or promote it. However, we do recommend that you shop around and compare services and costs with other companies while performing you own due diligence, especially since people’s experiences with companies can change over time.
We are not attorneys and we don’t provide legal advice. As always, we encourage you to do your homework and check out individuals and companies before you hire them. If you are already working with an attorney, we urge you to ask them your questions. After all, they will be familiar with your situation and the laws in your state.
We hope that you find Solvable helpful in your efforts to get a fresh start.
Personal Loans Advertiser Disclosure
The Personal Loan offers that appear on this site are from companies or affiliates from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear or whether a lender is “featured” on the site). solvable does not include all Personal Loan companies or all types of offers available in the marketplace.
Personal Loan Providers determine the underwriting criteria necessary for approval. You should review each Provider’s terms and conditions to determine which loan works best for you and your own personal financial situation. All reasonable efforts are made to provide and maintain accurate information. All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each Provider’s or affiliates discretion. There is never a guarantee you will be approved for credit or that upon approval you will qualify for the advertised rates, fees, or terms that were shown.
Be sure to speak with your representative about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask up front about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $35,000 may be available through participating lenders or affiliates; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. In some cases, lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Ask your representative for details.
Credit Card Advertiser Disclosure
The card offers that appear on this site are from companies or affiliate offers from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear). solvable does not include all card companies or all card offers available in the marketplace.
Credit Card Providers determine the underwriting criteria necessary for approval. You should review each Provider’s terms and conditions to determine which card works for you and your personal financial situation. Information is provided by the Credit Card Providers and is not a guarantee of approval.
All credit card rates, fees, and terms are presented without guarantee and are subject to change pursuant to each Provider’s discretion. All reasonable efforts are made to provide and maintain accurate information. There is no guarantee you will be approved for credit or that upon approval you will qualify for the advertised rates, fees, or terms shown.
Any opinions, analyses, reviews or recommendations expressed in articles, marketing materials or otherwise are those of the author’s alone and/or solvable, and have not been reviewed, approved or otherwise endorsed by any Credit Card Provider.
See the online Provider’s credit card application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the “Apply Now” button, you can review the credit card terms and conditions on the provider’s website.
Business Loans Advertiser Disclosure
Business Loan offers that appear on this site are from companies or affiliates from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear or whether a lender is “featured” on the site). solvable does not include all Business Loan companies or all types of offers available in the marketplace.
Business Loans are those loans that are for commercial use and any property and/or proceeds from the proposed request will be used by the requestor for commercial purpose only and not for any personal, family or household purposes.
Most of our Business Funding Partners or affiliates, do not require collateral for business loans; however, please note that it is possible to be offered another product by the lender depending on your needs and if the underwriting requirements dictate the same. Traditional bank and SBA loans generally are known for collateral requirements.
There is no one-size fits all business loan. Rather there are several types that will likely be offered and or discussed with you upon completing your request. Business Funding Partners determine the underwriting criteria necessary for approval, you should review each Partner’s terms and conditions to determine which business funding option works for your business’s financial situation. All reasonable efforts are made to provide and maintain accurate information. All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each Partner’s discretion. There is never a guarantee your business will be approved for credit or that upon approval your business will qualify for the advertised rates, fees, or terms shown. Lender terms and conditions will apply and all products may not be available in all states. Ask your loan representative for details.
Student Loan Refinancing Advertiser Disclosure
Student loan offers that appear on this site are from companies or affiliates from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear or whether a lender is “featured” on the site). solvable does not include all student loan companies or all types of offers available in the marketplace.
Potential savings may vary based on the interest rates, balances and remaining repayment term of the loans you are seeking to refinance. Your overall repayment amount may be higher than the loans you are refinancing even if your monthly payments are lower. Variable rate options will fluctuate over the term of your loan with changes in the LIBOR (or other index utilized by the lender) rate, and will vary based on applicable terms and presence of a cosigner. Fixed interest rates may be based on applicable terms and presence of a co-signer. Additional terms and conditions, and rates are subject to change at any time without notice and may not be available in all states or for all types of current student loans. Such changes should only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Lenders are required to provide every potential borrower with disclosure information before they apply for a private student loan. The Lender you select is required to provide you with an Application Disclosure and an Approval Disclosure within the application process before you accept the terms and conditions of your loan. solvable is not a lender or creditor, it does not offer, extend or alter credit terms. Only participating lenders can perform the full application and deliver the required disclosures, please ask your lender about rates, terms, fees, and potential discounts that may be available for each product.
Certain federal and private student loans may not be eligible for consolidation/refinance.
Certain consolidation/refinance plans may result in higher monthly payments or negative consequences (i.e. prepayment penalties).
Consolidation/refinance may lead to other negative results, such as loss of grace periods.
Loans in default generally cannot be consolidated until completion of a repayment trial plan so tell your lender if you are in default and determine relevant options (be wary of those asking for upfront fees as well)
Other options or programs may fit your needs (i.e. personal loan, debt consolidation and/or debt relief). Consult your financial and/or tax advisor prior to making any decisions.
Solvable is not a creditor as it does not offer, extend or alter credit; rather it is an online market lead generator that allows consumers to shop and compare rates, terms and costs associated with financial products such as mortgages, auto loans, personal loans, student loans, etc. solvable does not originate or fund any product it markets; rather it has a network of lenders or Partners/affiliates. You may choose to speak with one or more of these lenders or Partners/affiliates to determine what your actual terms and savings may be. Only a lender can provide you with a formal application for credit, your inquiry form here is merely an expression of interest and/or intent to obtain credit or assistance. You must discuss your actual credit situation and fill out the lender’s required documents prior to obtaining an extension of credit. Network lenders may not have the best or the lowest rates so you are encouraged to continue to shop and compare additional lenders, credit unions, local financial institutions, etc. to ensure you are truly getting your best deal for your situation.
You should contact your tax professional or other financial advisor to determine if you can actually realize savings by refinancing when it can extend the life of your current loan. You should ask the lender about all terms, rates, fees and costs associated with each product and if you will realize a net tangible benefit from the same. All initial estimated savings is done by trying to calculate what your rate may be; however, solvable does not have that information and cannot guarantee potential savings or that lenders will approve you for such product that would warrant those savings. Rates are not guaranteed and change daily. Lenders/Brokers/Dealers/Partners that perform the actual underwriting will have to determine if you meet their underwriting criteria which is unknown to solvable at the time of matching/offer/quote delivery. All amounts are estimates and examples only and do not represent an actual offer.
Congrats! You're One Step Closer To Resolving Your Tax Debt.