Atlanta IRS Collections Attorney

Offers In Compromise are agreements between taxpayers and the IRS to settle their tax liabilities. The IRS is willing to negotiate a settlement to collect what they can for individuals with economic resources that are not ample enough to cover what they owe. To figure out what this number is, the IRS uses something called the reasonable collection potential—which takes into account your available liquid assets and illiquid assets (like real estate), and subtracts from that amount your current and future living expenses.

If you elect to pay in a lump sum, you’ll need to offer 20% of the agreed upon amount, followed up with five or fewer payments within five months of the IRS accepting your offer. If you elect to pay over time with a periodic payment plan, you will usually have 6-24 months to make your payments. In some instances, the IRS will make special exceptions for qualifying situations.

It’s important to know that you must meet certain requirements to take advantage of an offer in compromise. In fact, the IRS generally accepts around 40% of the tendered offers. If there is a doubt in liability (the IRS acknowledges a dispute over the owed amount), doubt as to collectability (the IRS is unsure if your assets and income can cover the amount owed), or that the effective tax administration would create financial hardship, they will consider an offer in compromise.

It can be very helpful to have a tax attorney’s assistance in making an offer of compromise so that you do not agree to overextend yourself. Additionally, there are a number of spurious third party services who will try to take advantage of unsuspecting consumers by offering high interest loans to cover the taxes owed. That’s why connecting with a tax attorney is the best solution for negotiating an offer in compromise that will both satisfy the IRS and maintain your financial resources.