How to Settle Your IRS Tax Debt for Less: The Secret Behind Offers in Compromise

Did you know the IRS can settle your tax liability for less than what you owe? It's called an Offer in Compromise (OIC)—but it’s not as simple as it sounds. If you’ve heard rumors about "settling for pennies on the dollar," don’t get your hopes up too quickly. The IRS has strict guidelines, and only a small percentage of taxpayers qualify. However, if you’re in a tough financial situation, it’s worth exploring.

Here are the three main bases the IRS considers for an OIC:

1. Doubt as to Collectability

This is the most common reason people apply for an OIC. If there’s doubt you’ll ever be able to pay off your full tax debt, the IRS will evaluate your assets, income, and future earning potential. If they determine that you can't realistically pay the full amount, they may accept a lower offer.

2. Doubt as to Liability

Sometimes, you may believe that the amount of tax the IRS says you owe is incorrect. Whether it's due to discrepancies in records or differing interpretations of tax law, this category allows you to challenge the accuracy of the tax debt itself. However, this is a complicated legal issue that typically requires professional guidance to navigate successfully.

3. Effective Tax Administration

What if you technically have the funds to pay your tax bill, but doing so would cause you serious financial hardship? In this case, the IRS might settle for less if collecting the full amount would be unfair or unjust. You’ll need to prove that paying in full would cause you significant economic harm.

Things to Consider Before Applying

Before submitting an Offer in Compromise, it’s essential to understand the eligibility requirements. While an OIC can offer much-needed relief, it’s not a quick fix. The IRS thoroughly reviews each application, so it’s important to present your case clearly and accurately. That’s where expert guidance comes in.

Curious if You Qualify?

At Reliable Tax Relief, we specialize in helping individuals and businesses navigate the complexities of IRS settlements, including Offers in Compromise. Don’t fall for the "pennies on the dollar" myth—get personalized advice based on your unique financial situation. If you think you might qualify, let’s discuss your options.

Contact us today to schedule a consultation and see if an OIC is right for you! www.getreliabletaxrelief.com