If you’re struggling with debt, one option you may have is debt settlement. When you settle your debt, you convince your creditor to accept a portion of what you owe and forgive the rest. Many creditors are willing to negotiate terms and settle debt because the alternative (bankruptcy) could eliminate the debtor’s liability for everything they owe, thus leaving the creditor with little to no repayment.
Currently, the OIC filing fee is $205. You will also need to submit an initial payment, which the IRS will apply toward your debt whether or not they accept your OIC. You may be able to waive this fee and the initial payment, however, if you qualify for the low-income certification. If you have an installment agreement with the IRS, you will not need to continue making payments while your OIC is pending.
How to Get an Offer in Compromise Approved
Getting an Offer in Compromise approved can be a significant challenge without assistance. The IRS can use several methods to collect what you owe, and they are not bound by the same legal restrictions as private creditors.
To qualify for an OIC, you must meet several basic criteria. To be eligible for an OIC, you:
- Must have filed all required tax returns;
- Must have made all required estimated payments; and
- Cannot be in an open bankruptcy proceeding.
You will also need to submit evidence and documentation. You must make an appropriate offer, which will depend largely on your unique financial circumstances. This is where a qualified attorney can be extraordinarily helpful.
Generally, the IRS will accept your OIC if it believes you can’t pay what you owe in a reasonable amount of time. Collecting tax debt takes money and time, and the IRS may settle if it believes the rest of your debt simply isn’t worth pursuing. When considering your OIC, the IRS will evaluate your income, expenses, asset equity, and general ability to repay your debt. An experienced attorney can evaluate your situation and determine whether the IRS may be motivated to accept an OIC.
The OIC process may take at least six months, but it could be longer if you need to reapply or appeal after your application is returned or denied. This is another reason why hiring an attorney is critical. With debt-related issues, time is of the essence, and a trained professional may be able to help you avoid the reapplication or appeal process entirely.
Ultimately, an experienced attorney will be able to develop the best possible strategy for your situation. If you would like to achieve financial freedom sooner rather than later, retaining professional assistance is an investment you cannot afford to forego.
Bring Your Case to Our Team
At Napoleon Law Firm, PLLC, our attorney has handled countless cases involving the IRS. We can help you submit an Offer in Compromise with the highest possible likelihood of approval. We can also help you understand all other options at your disposal, answering your questions and providing fierce advocacy every step of the way.