“Call us today and settle your tax debt for PENNIES ON THE DOLLAR!“
“We have a special relationship with the IRS and we can wipe your taxes away!”
“The federal government has a new program that allows you to settle your taxes for next to nothing!”
If you know anything about Kansas City Tax Mediation, you know we never say things like this because many clients simply make too much money to qualify for any type of settlement for less than the taxes owed, although they may be able to take advantage of a variety of other options for discharging tax debt.
What these other companies are referring to is known as an Offer in Compromise. An Offer in Compromise is the program through which the IRS writes off tax debt. It is not for everybody, but if you qualify it can be a great opportunity to start over. But don’t be fooled; getting an Offer in Compromise approved is not a simple process. Here’s how an Offer in Compromise works:
If you can not afford to pay your tax debt, you may file for an Offer in Compromise. In that offer, you must include a statement of your assets, your income and expenses. In an Offer in Compromise, the IRS uses a specific set of rules for this financial statement. For example, for monthly Food, Clothing and Miscellaneous expenses the IRS will allow you to take a standard amount without providing documentation, while for other expenses like health insurance you must prove the accuracy of the amount.
From the time you file your Offer in Compromise to the time your Offer in Compromise is accepted or rejected, a year or more may pass. During this time, the IRS’s statute of limitations for collections is extended. Therefore, filing an Offer in Compromise might hurt you if you are not a good candidate.
Call Kansas City Tax Mediation if you are wondering whether or not you qualify for an Offer in Compromise. Let’s get through this together.