Can you believe that the average American has over $900,000 in debt?
If you add tax debt to the equation, it can feel like you’re on the verge of drowning. Debt is something that can easily snowball and ruin many aspects of your life, including your ability to acquire assets, get loans, and more. The good news is that the IRS has various avenues you can take.
Are you wondering if an offer in compromise is an option worth pursuing? Keep reading to learn all about IRS OIC and how it can help you get out of debt.
What Is an Offer in Compromise?
Put in the simplest terms possible, an offer in compromise is a type of IRS program in which someone can pay off their debt at an amount that’s less than what they originally owed. This is a win-win scenario because it helps you get out of debt much more quickly and still gives the IRS a sizeable amount of the money that they need.
The exact amount will depend on various factors, such as your income, the original debt size, and more.
Am I Eligible for This Option?
It’s an unfortunate fact that not everyone can take advantage of an offer in compromise. For instance, you can’t qualify for OIC if you’re in the process of an open bankruptcy. It’s also crucial for you to have made your required payments and filed the appropriate tax returns.
You should also have a valid extension on your taxes within the current year you plan on applying. As an employer, you should have made your tax deposits for 3 quarters, including the current one.
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How Do I Apply?
If you think you qualify for an offer in comprise, then it’s necessary to file an application. Your application package should include Form 433-A (OIC) if you’re an individual or Form 433-B (OIC) if you’re applying as a business. Don’t forget to fill out the form carefully because one mistake could cause a significant delay.
Keep in mind that there is an application fee of $205. It’s possible to apply as both a business and an individual, but the forms should still be separate.
In the worst-case scenario, if your application is denied, your application cost and associated fees can be applied to your original debt. For help with tax relief, be sure to check out this link.
Are You Ready to Opt for IRS OIC?
Now that you’ve learned all about IRS OIC, you can use this as a way to alleviate your debt. Once that financial weight is off your shoulders, you can start breathing again.
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