What is an Offer in Compromise?

What is an Offer in Compromise?

Unfortunately, due to the economic recession many small businesses in the United States have struggled to stay afloat over the last several years. Many have succumbed to business debt and have been forced to close their doors. As a result of the recession we have seen a rise in options and products for helping individuals and businesses that have fallen into debt.

Options range from debt counseling services, to debt settlement or even debt consolidation. One option made available by the IRS for individuals or business owners who have fallen into tax debt is the Offer in Compromise.

Much like a debt settlement is payment plan agreed to between the debtor and the companies they owe money to, an Offer in Compromise is an agreement between the IRS and the tax payer to settle tax debts for less than the total amount owed.

The program was established by the United States Congress to give qualified tax payers struggling with tax debt an opportunity to get out from under their debts. Through the Offer in Compromise, the IRS settles tax liabilities with qualified taxpayers for less than the total amount they owe. The amount that will be paid and the time period for payment are negotiated according to the individual’s specific situation.

The new amount owed will still be equal to or more than the total value of the person’s assets. Again, the program only handles tax debt, not business loans or credit card debt.

Obviously, the IRS isn’t going to let just anyone get away with paying them less than they owe. The Offer in Compromise is not a loophole for getting out of tax payments. To be eligible you must prove to the IRS that you have exhausted all other options, you must file all your tax returns, and you must prove that you are unable to pay your taxes.

To be eligible for the program there is a lengthy application process. Hiring a tax attorney to guide you through the process is not required but certainly recommended. Not only is there exhausting amounts of paperwork to file and negotiations with the IRS, but each State – from Texas, to New York, to California – has their own tax laws that need to be taken into account.

If you feel trapped by overwhelming amounts of tax debt, you’re facing bankruptcy, and you are in jeopardy of losing your business – or worse – your home, research the Offer in Compromise program through the IRS. You can potentially save thousands of dollars in tax payments and penalties.

Your tax problems hinder your personal life but they put a strangle-hold on your businesses ability to succeed. Take the weight off your shoulder by resolving your tax debt.

Corporate Turnaround: Helping Small Businesses Get Out of Debt.

Since 1998, Corporate Turnaround has been helping small businesses resolve its debts without a loan and without bankruptcy. Corporate Turnaround has successfully resolved over 25,000 debts within an affordable budget for their clients. Learn more about Corporate Turnaround

Corporate Turnaround is the Official Debt Management Partner