Under its Offer in Compromise program, the IRS occasionally will negotiate a tax settlement for significantly less than the balance owed. The Offer in Compromise (or OIC) program, in the USA, is an Internal Revenue Service (IRS) program enables qualified people with an outstanding tax debt to negotiate a decided sum that’s less than the total owed to clear the debt.
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As an example, in 1994, after hounding the country singer Willie Nelson since 1980, the IRS taken a final compromise settlement of $59 million on a $32 million tax bill. The IRS accepts many offers in compromise which can be correctly submitted and not too outlandish.
Do not believe that the IRS takes the forgiving of any tax debt lightly. It’s going to take less only if it’s dubious more will be collected after. To get the IRS to take an offer in compromise, you have to show to the IRS that it is in its-not your-best interests.
There’s an IRS filing fee for making an offer unless you happen to be indigent. And, in many cases, a partial payment of 20% of the tax debt has to be produced with the offer filing.
An offer in compromise must be produced on IRS Form 656. It has to come with a completed IRS Form 433-A (individual) and, for those who are in possession of another business entity, Form 433-B (business). (These will be the financial disclosure forms used in most IRS collection scenarios.)
You will be requested to supply confirmation of your financing-such as bank statements for the last three to 12 months, living expense receipts, vehicle rides, mortgage notes, rental and lease arrangements, and an inventory of outstanding debts.