Payment Options for IRS Offer in Compromise

Connecticut taxpayers seeking an IRS offer in compromise can chose from three basic payment options:

 

  1. Lump sum cash offer
  2. Short term periodic payment offer
  3. Deferred periodic payment offer

The submission of an offer in compromise payment request of any type requires the filing of a Form 656 along with a $150 application fee and an initial, non-refundable payment. The initial payment will vary based upon the amount of the offer and the chosen payment amount. The IRS provides an offer in compromise pre-qualifier tool to allow taxpayers to confirm their eligibility and prepare a preliminary offer in compromise proposal.

For a review of your offer in compromise potential, call the Law Offices of Neil Crane, LLC, at 203-230-2233, call us toll free at 888-249-3027 or contact us online. We'll take the time to make a thorough examination and analysis of your unique tax problem.

Lump Sum Payment Offer in Compromise Agreements

All lump sum payments require accepted offer in compromise payments within five periodic installments or less, starting upon written notice of acceptance of the offer. All lump sum installment offers must be accompanied by a non-refundable payment of 20 percent of the offer amount. The basic form of offer in compromise settlement agreements are:

  1. Payments in less than five months. This offer must include the amount of present realizable assets based on asset valuation guidelines and total realized monthly excess collectible income based on allowable expenses over a period of 12 months.
  2. Payments in more than five months but within 24 months. This offer must consider realizable asset valuation plus collectible excess income over 24 months.
  3. Payments in more than five months and longer than 24 months. This offer must include realizable asset liquidation values plus excess collectible income monthly until the running of the applicable statute of limitations.

Choosing the proper criteria for submitting an acceptable offer in compromise lump sum settlement of any duration requires a complete evaluation of your particular tax situation. At the Law Offices of Neil Crane, LLC, we take the time to examine your specific individual circumstances. We've developed a wealth of knowledge through years of examining taxpayer budgets and familiarity with total asset valuations and realizable monthly collectible income.

Short Term Periodic Offer in Compromise Payment Offers

This payment option requests that the IRS take taxpayer payments within 24-month installments from the date of submission of the short term offer request. All payments made are non-refundable. As with many IRS offer in compromise payment options, the offer amount must include the value of realizable present assets plus total collectible income over the 24-month collection period. Since regular payments must be made from the date of submission and all through the IRS's evaluation period, it is essential to properly prepare and evaluate the appropriate offer amount. Remember these payments made under a rejected short-term installment offer are non-refundable.

Failure to make any of the proposed payments will result in return of the offer and loss of the interim payment installments.

Since the IRS is not required to accept an offer in compromise on grounds of amount or payment period, it is essential to submit the proper combination of amount offered and periodic payment terms under your specific circumstances. To maximize your chances for success with the IRS, rely on the assistance of a local tax professional. Don't be misled by outside promises from unverified companies. Rely only on the advice of a qualified tax relief professional who has carefully examined your full financial picture and any upcoming changes. The stakes are high and there are no short cuts. Success requires knowledge, experience and hard work.

Deferred Periodic Offer in Compromise Payment Offers

This installment payment option requests that the offer amount be paid over the remaining statutory period allowed for collection of the tax debt due. It requires payment of regular installments during the investigation period. All installments are nonrefundable, in the event of rejection of the offer based on overall payment amount or the time period of the proposed long-term offer in compromise agreement. Any failure to submit payments during the IRS investigation period will deem the offer withdrawn.

Put our knowledge and experience to work for you by calling a tax relief attorney at the Law Offices of Neil Crane, LLC, at 203-230-2233 or toll free at 1-888-249-3027. You can also contact our offices online. We offer a free initial consultation with all the legal protection of attorney/client privilege. We have office locations in Hamden, Bridgeport, Ridgefield, Waterbury and Rocky Hill, Connecticut.

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