Facts About Offer In Compromise - article about Facts About Offer In Compromise

Facts About Offer in Compromise

If you know the facts about offers in compromise, you will find it much easier to keep a bad situation with the IRS from escalating into something worse - that is, more expensive. Legislation creates noteworthy changes to the OIC program. Therefore, in order to make sure that you are doing your part and keeping up with the requirements as stipulated by the IRS, you need to keep up with the latest legislation as it pertains to offers in common.

The Tax Increase Prevention and Reconciliation Act of 2005 went into effect in July of 2006. This changed some of the facts about offers in compromise. Some things that you need to know include:

You must include in your offer in compromise application the following: Form 656-A, a check for the application fee in the sum of $150 and a check for 20 percent of the total amount proposed or the first of the proposed periodic payments.

If your application package is missing any of the required components, your application and checks will be returned to you as unprocessable.

You cannot be in bankruptcy and qualify for an offer in compromise.

Your application may take up to two years to process.

You must make payments on your debt while your application is in process.

The catch of offers in compromise? This is an offer that you are making to the IRS – an offer that they do not have to accept. They can take up to two years to decide whether or not to accept your offer and, in the meantime, you are expected to continue making payments on your owed taxes. Also, even if your offer in compromise application is denied, your check for 20 percent of the total and the application fee are non-refundable.

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