Nobody wants to be drowned in tax debt. It can take a toll on anyone, and it would be very hard to settle tax obligations, especially if your financial and personal situation keeps getting worse. If you are currently in that situation, please know that there is still a remedy. A perfect example is the Offer in Compromise (OIC).

It gives you the chance to have a clean slate. How much should I offer in compromise to the IRS? Who is eligible to make an offer in compromise? The offer in compromise was made to help taxpayers with their tax debt and make it lower than the amount previously owed.

Who can file for an offer in compromise (OIC)?

To know if you are eligible for an offer in compromise, the first thing you should do is to submit an application to the IRS, and you must clearly demonstrate financial challenges. The IRS will most likely approve your application if:

  • The IRS has come to the realization that it is impossible for them to collect payment from you because of your current financial situation.
  • Another thing that would make you eligible for OIC is a doubt as to liability. Should you wish to use this route, you need to file form 656-L. It is based on the premise that the debt you owe is just or not.

If you visit the IRS’s official website, there is a pre-qualifier tool. Use it to determine if you are eligible for an offer in compromise. However, you must keep in mind that such a status is only temporary. Your income will be reviewed periodically to ensure that your situation has changed and that you now have the ability to pay your existing debt. After all, it is your debt, and you owe it to the government. You must pay for it one way or another.