A lot of people have experienced financial challenges over the past few years. Whether it be getting in too much debt with their home, credit cards or the IRS. Today we are going to talk about a possible strong option to help you take care of your IRS debt. It is true that the IRS can cause a lot of problems in your life including jail time for not handling your challenges with them but surprisingly if you are upfront with them and stay in communication many times the IRS will work with you in a sensible manner. In the end your best bet is to chat with them and find a solution. Be careful with those late-night commercials that rant about getting your debt resolved for pennies on the dollar. Although they be legitimate you may be able to save yourself a lot of money by doing it yourself. It isn’t that complicated as you’ll see. That process is called OIC or Offer in Compromise and although it’s true that you may be eligible to settle your debt for less that you owe with the IRS it may not be the best thing to do. Again, reaching out to them at the earliest sign of a challenge to see what’s best for you is the best route. Let’s talk about qualifying for an OIC agreement for a moment. If you owe a lot of money in comparison to your assets than you may be a strong candidate for an OIC. Basically you have to prove to the IRS that in your current state you do not have the means to pay and you negotiate a payment plan with them to pay what you’ve agreed to.
IRS - Offer in Compromise Qualifier
The IRS has actually come up with a survey that you can take that will tell you if you qualify for an OIC.
IRS - Offer in Compromise Form 656
If you do qualify you can then proceed with the IRS Form to begin the process. There is a $150 non-refundable deposit that you have to send in with your form. You may qualify to have that fee waved if the IRS deems you low income certification guidelines. See page 2 of form 656 to see if you are eligible.
If you are accepted in to the program you will have to set up a payment schedule with them. Maybe it’s reduced so much that you can pay them off in one payment. If not then you will work with them on a monthly payment for a specified period of time. Don’t ever miss a payment.
IRS - Offer in Compromise booklet
The IRS has a very comprehensive booklet that you can take a look at to get a further understanding of who an OIC is for and how to complete the process.
In closing an OIC may be a great solution to help you with your IRS tax debt. There are other installment payment programs that you may qualify to assist you if you don’t qualify for an OIC.