How do i know if i qualify for an offer in compromise or an installment plan for my tax debt relief?

It's an IRS tax debt relief program that allows you to settle your tax debt for less than the full amount you owe. A commitment offer (OIC) is a proposal to pay the California Department of Tax and Fee Management (CDTFA) an amount less than all of the taxes or fees due. Announcements about how to pay off your tax debt by cents on the dollar usually refer to the process of requesting a commitment offer from the IRS (OIC), which is an IRS program designed to help people pay at least part of their tax debt. To qualify for an OIC, the taxpayer must have filed all tax returns, received an invoice for at least one tax debt included in the offer, have made all the estimated tax payments required for the current year and, if the taxpayer is a business owner with employees, must have made all the required federal tax deposits for the current quarter and the previous two quarters.

Debt consolidation and debt settlement are two terms that are often linked together, but they are two completely different ways of managing debt. A “compromise offer” is a little known but extraordinarily effective way for thousands of people with problems with the IRS to routinely eliminate tens of thousands of dollars in tax debts. A compromise offer is often the best option to get rid of tax debt you can't pay. The CDTFA is making it easier for taxpayers and business owners affected by the recent California storms to obtain tax relief.

You can hire a qualified tax professional or a tax relief company to help you do the paperwork, but it's not mandatory and the money you pay them may be more than the money you expect to save on your taxes. There is a real legal dispute over whether or how much your tax debt actually exists. These amounts apply to tax liabilities and the taxpayer has the right to specify the particular tax obligations to which the periodic payments will apply. In some cases, an OIC is returned to the taxpayer instead of being rejected, because the taxpayer failed to submit the necessary information, filed for bankruptcy, did not include the required application fee or a non-refundable payment in the offer, did not file the required tax returns, or did not pay their current tax obligations at the time the IRS is considering the offer.

For example, if you received an OIC for an obligation that was calculated as excise taxes due on cigarettes purchased outside the state, your tax liability for subsequent purchases of cigarettes will not be compromised.

Lorraine Cernota
Lorraine Cernota

General social media junkie. Passionate writer. Infuriatingly humble web maven. General writer. Amateur pop culture specialist.