Offers In Compromise are a great way to resolve a tax liability as long as you qualify. However, there are certain instances that you should not file an Offer:
- If your collection statutes are about to expire. The Internal Revenue Service has ten years to collect on tax debts once the balances are assessed. If the liabilities are not satisfied by the collection statute expiration date, the remaining balance will be written off. An Offer In Compromise suspends the collection statutes and there is no guarantee the offer will be accepted.
- If you are currently in bankruptcy or you are going to file for bankruptcy. Whether it is a Chapter 7, Chapter 11, or Chapter 13, if you have filed for bankruptcy, you cannot file an Offer In Compromise. Negotiations cannot be made through the IRS Offer Unit if you have filed for bankruptcy.
- If you are lacking overall tax compliance. If you have not filed tax returns or have consistent issues with filing timely, an Offer In Compromise may not be your best option. You may have a good shot at getting your offer approved; however, if you cannot be in absolute tax compliance for the five years after acceptance, your liability will be reassessed to you.
Do not take your tax situation lightly. Reach out to a trusted professional today to obtain additional insight into your situation.
Call Timberline Tax Group at 844-345-3250 for a free consultation.