The IRS wants to help struggling Americans that may have a hard time when it comes to paying their taxes.
One of the ways they’re offering help is by offering a offer in compromise to help taxpayers avoid being scammed.
Sometimes people will hire businesses and end up paying unnecessary fees. Many fees are for things they don’t qualify for with the IRS standards.
To learn more about the scams the IRS warns against, click here.
If people are worried they won’t be able to pay what’s necessary, the IRS wants them to consider an offer in compromise.
How does an offer in compromise work?
The OIC works to bring the total down to below what is owed.
Related: Surprise tax refunds will be deposited into thousands of Americans bank accounts by the end of the year, will one be yours?
If paying taxes causes financial hardship it may be a good option. The IRS takes into consideration your personal circumstances when deciding if you qualify.
People’s eligibility is determined by the IRS. They look at your ability to pay, income, expenses, asset equity, and all other payment options.
If denied or filled out wrong, the IRS will return the filed offer along with the application fee.
If you have an open bankruptcy proceeding you are not eligible.
It varies on how much your bill can be reduced, but it could be in the thousands.
The OIC is usually approved when the amount is the most the IRS thinks they can get in a reasonable amount of time.
You will not make money off of an OIC accepted by the IRS.
There are different payment options, with one being an initial payment of 20% of the total offer with your application.
If accepted, you’ll be notified in writing and the remaining balance is to be paid in 5 or less payments.
A periodic option means you’ll pay the initial payment with your application.
Meeting the Low Income Certification guidelines make it so you do not need to pay the application fee or initial payment.
Return: Tax refunds are still slow for 2021, here’s how to make sure you get your 2022 tax returns quickly next year
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