If you’re trying to find a way to reduce your tax debt, an offer in compromise might be an option for you.
Tax attorney Lucas Frei discusses how an offer in compromise works and whether you may qualify for one.
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Hello, everyone. Lucas Frei here, lead tax attorney, Robinson and Henry, P.C. I’d like to talk about offers in compromise quickly with you here today.
What’s An Offer in Compromise?
An offer in compromise is a way in which we negotiate down tax debt with the IRS.
It is not one size fits all. It is not a great strategy for a lot of people.
For those that do qualify for it, though, it is important to have excellent representation, and it’s important to supply the IRS with all information required.
Forms You Need for an OIC
There’s two separate forms you have to file for an offer in compromise. That’s form 433-A and then form 656. Both of those need to go in. You also need to include a application fee and then also an offer amount, right?
So we need to offer the IRS some sort of money in order for them to forgive the rest of the debt.
All of these things go together, and we look at all of your assets, all of your income. We do an analysis on this.
If you do file an offer in compromise and you’re not qualified for one, it actually is more detrimental to you than it is helpful.
So talk to a qualified tax practitioner, discuss whether or not that you’re qualified for an offer in compromise, whether not it can help you out.
Alternatives to Offer in Compromise
There are other options via installment agreements or abatements. Other things we can always do for you.