Applying for an Offer in Compromise is an important option for many taxpayers who are unable to pay the tax debt they owe the IRS. An Offer in Compromise (OIC) allows a taxpayer to settle their debt for less than what is owed, if they can demonstrate that it would be impossible for them pay the full amount owed. There are several steps involved in the application process (and several things you shouldn’t do when filing). Once the application is complete, the taxpayer must wait for the IRS to evaluate the application materials and issue a decision. It is important to take the proper actions during that time period to make sure that your application is not jeopardized.
5 Steps to Take After Applying for an Offer in Compromise
After putting in the time and effort to submit an application for an Offer in Compromise to the IRS, the waiting period begins. During this time period, it is important to do all of the following to make sure you give your offer the best possible chance of success:
- Continue filing all of the state and federal tax returns you are legally required to file.
- Continue making all required federal estimated tax payments that are due for current taxes.
- Continue making all required tax deposits due for the current tax year.
- Make all required periodic offer payments.
- If the IRS requests additional information, reply promptly and within the timeframe specified. If you do not reply on time, your OIC may be rejected. In some cases, your right to appeal the rejection may also be revoked.
By following the above guidelines, you can avoid inadvertently interfering with the alternative solution to your tax problem you are seeking. Fortunately, taxpayers are entitled to seek assistance from a knowledgeable attorney in order to ensure that they are handling their tax problems in the best manner possible. We have helped many clients successfully navigate this process. To learn more, we encourage you to check out our client testimonials today.