The only way for taxpayers to get out of debt with the IRS is to pay the amount owed, but not everyone can do so. A tax lawyer can help you negotiate for an Offer in Compromise (OIC), which will allow you to settle for less than you owe. While this is an ideal option to get out of debt, not everyone can qualify. Here are some basic eligibility requirements to qualify for OIC.
- The first thing the IRS will consider is your ability to pay based on your income, expenses and asset equity, and whether they can collect tax, interest and penalties in the foreseeable future and within a reasonable period of time.
- If there was a mistake with your assessed tax liability, the IRS can consider you to qualify for OIC. However, there must be proof of the error.
- If the amount of tax owed is correct but there is reason to believe that you will be left in financial crisis when it is collected, you could qualify for OIC.
- The IRS would not consider a taxpayer to be eligible for the OIC if he or she is currently going through bankruptcy and has not filled all federal tax returns that were required in the previous years.
If you are finding difficulty keeping up with payments, you should not delay and seek help immediately before things spiral out of your control. A tax lawyer can help you file for OIC.