IRS Tax Settlement - The Offer in Compromise - Can You Settle?

Using Offers in Compromise to Settle A Tax Debt

The Offer in Compromise (OIC) program is an IRS settlement program which allows any qualified individual or business with an unpaid income tax liability to negotiate a settlement for an amount that is less that the total owed to clear the debt. It is in the best interest of the individual or business and the IRS to compromise and come up with a voluntary agreement and future payment plan rather than the possibility of the debt not being paid and settled.

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There are conditions that have to be met in order to be eligible and qualified to settle with the IRS. When you talk to the IRS income tax relief experts at Flat Fee Tax Service, Inc., we will ask you specific questions to help identify as to whether you will meet the qualifying conditions for an IRS settlement.

Conditions for Filing An Offer in Compromise

There are three conditions that exist before an installment agreement will be accepted. First and foremost, the doubt as to liability, which refers to a person who owes, should show some reasons that the income tax assessed might not be correct. Second, the effective administration of tax, which can reduce the debt of an individual if there’s an explanatory circumstance, mostly being applied to the disabled and elderly taxpayers. The one settlement condition that you need to be concerned with is: the doubt as to collectibility, which means that the financially struggling taxpayer will show that IRS will unlikely never receive payment of the overdue income tax. It is a matter of knowing the IRS settlement rules, preparing the IRS documents correctly and presenting to the IRS our clients need for a settlement.

"Doubt as to Collectibility" means that a taxpayer cannot afford to pay the income tax owed.


The doubt as to collectibility (DATC) is the usual condition that is being accepted. In kind of case the amount to be settled is generally in 60 months of income disposable plus any assets equity that you own. This calculation will be done using the formula provided by the IRS, and once we determine how much disposable income based on allowed monthly expenses and your current income. A complete financial statement will have to be presented and many other documents in order for the IRS to consider you as a possible candidate for the Offer in Compromise Fresh Start program.

If you owe less than $10,000, you’re not eligible for the program offer in compromise. However, the Offer in Compromise (Fresh Start Initiative) can be a super great deal for people who owe a huge sum (more than $10,000) of income tax debt. 



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