What is an Offer in Compromise?

If you owe federal taxes, penalties and/or interest, an “Offer in Compromise” may allow you to pay only a fraction of the amount due. It is structured to help facilitate what may be your inability to pay what may be due in a reasonable amount of time, and also to defer some of what is due, if you dispute what the IRS claims is due.

Jozwiak Law has advised many of our clients through the years on how to successfully eliminate millions of dollars of Federal taxes owed by taking advantage of the “Offer in Compromise” program. Whether your tax bill is large or small, and whether or not you have a modest or substantial income, this program can possibly work in your favor. Further, there are many states that also offer this type of resolution for tax problems, but they will undoubtedly be structured differently than the program offered by the IRS, so conduct your due diligence beforehand.

Jozwiak Law believes that for an individual to fully reap the intended advantages of the “Offer in Compromise” program they need to have the representation of someone who has extensive knowledge and experience in navigating its intricacies. The fact that the application process demands the submission of substantial amounts of very accurate and specific information and documentation relative to the submission, and that it all must all be submitted under penalty of perjury, further enforces this belief. If the “Offer in Compromise” process is not fully adhered to, or is incomplete, your submission will undoubtedly be returned to you without having ever been considered at all. Furthermore, if any fraudulent or erroneous information is submitted willfully, it can result in a criminal investigation.

Like many legal processes, the “Offer in Compromise” is a negotiation and it can be appealed. After the Internal Revenue Service agrees to process your “Offer in Compromise,” the revenue agent assigned to the claim must be convinced that it is a valid one. More times than not, this requires the submission of additional or updated information, and very good negotiating skills.

NOTE: Not all people qualify for an “Offer in Compromise”, and you must be very careful not to submit a request if it is not the proper thing to do in your case. Serious consequences could arise as a result. You should always get the opinion of a qualified tax lawyer before proceeding with an “Offer in Compromise”, in the hope of resolving your tax problems.

If you feel that any of this applies to you or your situation, do not hesitate to call us for an appointment.

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