Selecting the Right Offer in Compromise Attorney

Based on the current economic downturn, many taxpayers find themselves unable to pay their tax bill. That’s why many request an offer in compromise from the IRS. But an offer in compromise is not for everybody. Many people believe that if they currently do not have the funds on hand then the IRS will automatically settle on the tax debt. This is simply not the case.

Prior to submitting your request for an offer in compromise, make sure that you explore all other options first. You may be able to borrow funds from family or friends and or even be able to take out a personal loan.

Taxpayers must file Form 656 or Form 656-L. Be advised that if you have a tax lien on record prior to acceptance of the offer, the lien will not be released until the offer terms have been satisfied or until the tax liability is paid in full, whichever occurs first. A Notice of Federal Tax Lien is often filed during the course of an offer in compromise settlement investigation.

Not only is it critical to file your forms timely, you must make sure that you carefully reply to any IRS correspondence. The IRS may request additional information in order to process your offer.

Along with your completed forms you must make sure that you make the required payments. The general rule that you must follow when determining how many offers and the related application fees due is that there is one payment fee and form per entity. Form 656-B contains an application fee and a payment matrix that will help you determine the number of forms that must be filed and how many application fees are required.

An important step in the process is making sure that you are current on all your tax filings. It will not look good to the IRS if you are not filing tax returns or making timely tax payments.

An offer in compromise is not for all taxpayers. Most will not qualify because they have financial resources or the ability to make installment payments. If you believe that you qualify make sure you are diligent in your efforts and provide the necessary paperwork. Then be prepared to wait.

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