Offers in Compromise

Offers in compromise is a process in which you can reduce your Internal Revenue Service or State tax debt by negotiating with the taxing agency to lower your tax bill. This process is often referred to as settling your taxes for “pennies on the dollar.” Your three basic arguments to reduce or eliminate your taxes are as follows: 1) You owe the tax but you can’t pay; 2) IRS is wrong – you don’t owe the tax as claimed by the government; 3) You owe the tax and you CAN pay but collecting any money from you would be unjust.

Majority of the taxpayers fall into the first category (ie: You owe the tax but you cannot pay the IRS the full amount of what is owed). For the IRS to consider an offer in compromise, you must at least offer to pay an amount equal to value of all your assets plus all the money the IRS “thinks” that it can collect from your future income for a period of 4 to 5 years.

The IRS will reject your offer if they believe that the amount offered by the taxpayer is less than what they could collect from their regular collection process. In that regard, it is very important review and analyze your case from the perspective of an IRS officer. Our California Offers in Compromise Attorneys and staff are well seasoned through experience and training to properly analyze and present your case to the IRS for a quick and favorable decision on the offer in compromise for its clients.