Tax payables are something that everyone must face, and, most of the time, people have a hard time paying tax debt. That is why they came up with an offer in compromise. The big question is how much you should offer in settlement with the IRS. The rule of thumb is that the offer you make must be equal to the net value of your monthly income and assets. Other factors must be considered too.
If you have calculated your monthly income and assets and you feel like you can’t still pay off your tax debt, don’t lose hope. There’s still another option, and that is to make an offer. Yes, the IRS accepts less money as long as you give them something to work with. They will consider your situation if you happen to be dealing with the following issues:
- Physical issues
- Psychological issues
- Tough financial situation because of age
- If you’re having a hard time because of alcohol and drug use
Let the IRS know about your situation by sending a letter to form 433-A. If you are appealing because of a medical condition, then you need to make sure you provide factual information from your doctor. That way, you will be able to gain the trust of the IRS. If your request was denied, do not lose hope. You can still find an appeal within 30 days of the rejection.
How long does the offer of compromise take to process?
It all depends on your personal situation, but in most cases, it would take several months. It would usually take six to seven months to complete the request. You can and must make payments to the existing plan, and penalties can be applied during such a period.