IRS Offer in Compromise

I’m tax attorney Steve Klitzner, and my practice is limited only to representing individuals and businesses with IRS problems.

And I’m very happy today to be talking about something that happened many months ago with the IRS, back in May 2012, because they actually announced the program with the offer in compromise that’s good for the taxpayer. Not only will it allow the IRS to accept more offers in compromise than ever before, but also for a lesser amount.

Now an offer in compromise is when we show the IRS that there’s no way you can pay all the tax that you owe. And if we show them that, they will make a deal for whatever it is we prove to them you can pay.

Let me give you an example. We had one case where the taxpayer owed $137,000, and we settled it for $100. But every case is different. We had one where the taxpayer owed $30,000. We settled it for $11,000. We have other cases. A person could owe $50,000, and the IRS won’t take a penny off because they can pay the whole thing.

Every case is different. Doesn’t matter what you owe. It matters on what your ability is to pay. And now the IRS is recognizing that, and they’re increasing the offer in compromise program to help taxpayers that really can’t afford to pay all their taxes.