IRS Offer in Compromise Attorney in New Jersey & New York
Can you fully eliminate back taxes, penalties, and interest at a discount? In some cases, yes. An IRS Offer in Compromise may allow a taxpayer to settle tax debt for less than the full balance owed.
However, an Offer in Compromise is not automatic, easy, or right for every taxpayer. The IRS closely reviews income, assets, expenses, equity, filing compliance, and what it believes it can collect over time. Todd S. Unger helps individuals and businesses evaluate whether an offer is realistic before submitting paperwork to the IRS.
Can You Settle IRS Tax Debt for Less Than You Owe?
An IRS Offer in Compromise is an agreement between the taxpayer and the Internal Revenue Service that resolves a tax liability for less than the full amount owed. The IRS generally has a limited period to collect a tax liability. If it appears that the IRS cannot collect the full balance during that period, it may consider accepting an offer.
The amount offered must usually reflect what the IRS believes it can collect from the taxpayer’s available assets and disposable monthly income. This is often referred to as the taxpayer’s doubt-as-to-liability.
Many taxpayers apply too quickly, offer the wrong amount, or misunderstand what the IRS is actually reviewing. Todd S. Unger helps evaluate whether an Offer in Compromise is realistic before you submit, so you understand both the opportunity and the risks.
Who May Qualify for an IRS Offer in Compromise?
You may need to evaluate an Offer in Compromise if your tax debt cannot be resolved through full payment, a practical installment agreement, or another IRS resolution option.
You cannot realistically pay the full IRS balance
Your income and assets are limited compared to the tax debt
You are current with required tax filings
You cannot resolve the debt through a manageable installment agreement
Collection would create financial hardship
There is a legitimate dispute about the tax liability itself
An Offer in Compromise is only one possible solution. Depending on your facts, the better path may be an IRS installment agreement, penalty abatement, or resolving unfiled tax returns before submitting an offer.
Three Main Grounds for an Offer in Compromise
Individuals and businesses may qualify for an IRS Offer in Compromise when there is doubt as to collectability, doubt as to liability, or a basis for effective tax administration.
Doubt as to Collectability
When your reason for submitting an offer is doubt as to collectability, you are telling the IRS that you do not have enough assets, income, or future ability to pay the full balance. In most cases, the taxpayer must show that the full tax debt cannot be paid through liquidating assets, borrowing, or entering into a feasible installment agreement.
Doubt as to Liability
A doubt as to liability offer may apply when there is a legitimate dispute about whether the assessed tax is correct. This can involve an incorrect IRS assessment, an inaccurate return prepared by the IRS, missed appeal opportunities, innocent spousethat issues, or other facts showing that you may not be legally responsible for the full amount.
Effective Tax Administration
An Effective Tax Administration offer may apply when you agree with the tax amount and may technically have assets available, but requiring full payment would create economic hardship or would be unfair because of exceptional circumstances. These cases usually require detailed financial documentation and a written explanation of the special circumstances.
Why the Offer Amount Matters
One of the most important parts of an Offer in Compromise is determining the minimum amount the IRS is likely to accept. Some taxpayers offer too much because they do not understand how the IRS evaluates income, allowable expenses, assets, equity, and future collection potential. Others offer too little and waste valuable time on an offer that was never likely to succeed.
The key is not simply asking the IRS for a discount. The key is showing, through financial analysis and documentation, why the IRS should accept less than the full balance based on the taxpayer’s actual financial situation.
Todd S. Unger does not recommend submitting an Offer in Compromise unless the facts support it. A careful review can help determine whether an offer is viable or whether another tax resolution strategy may produce a better result.
How Todd S. Unger Helps With Offer in Compromise Cases
Review the Full Tax Problem
The first step is reviewing the tax balance, IRS notices, filing history, collection status, assets, income, expenses, and any urgent deadlines.
Determine Whether an Offer Is Realistic
Before submitting anything, Todd S. Unger evaluates whether the financial facts support an Offer in Compromise or whether another IRS resolution option may make more sense.
Prepare the Offer Strategy
If an offer is appropriate, the next step is preparing the financial information, documentation, narrative support, and offer amount in a way that reflects the taxpayer’s true collection potential.
Protect the Bigger Picture
The offer must be considered alongside installment agreement options, penalty relief, currently not collectible status, bankruptcy timing, lien issues, and future compliance requirements.
IRS Offer in Compromise FAQs
Find Out Whether an Offer in Compromise Is Realistic
Before submitting an offer to the IRS, it is important to know whether the numbers support your case. Todd S. Unger can help evaluate your income, assets, expenses, compliance history, and tax debt resolution options.