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Initial payments and fees in offer in compromise requests

An offer in compromise, when accepted by the Internal Revenue Service, enables a person to fully resolve a tax debt through paying some, but not all, of the total debt amount. When applying for an offer in compromise with the IRS, among the things a person is generally required to provide along with their application are certain payments.

One of these payments is an initial payment on the tax debt. The amount of the initial payment and whether it is a one-time or ongoing payment depends on what overall payment option a person has proposed in their offer in compromise request. Whatever payment size and structure the initial payment takes, it is non-refundable.

Another thing a person generally is required to pay in their application for an offer in compromise is an application fee. The fee is currently $186. It too is nonrefundable.

As a note, individuals in certain low-income situations may be able to have these two requirements waived.

In addition to these payments, there are various other requirements that generally have to be met when it comes to asking for an offer in compromise. Meeting all applicable requirements is very important when requesting an offer in compromise.

Now, a person submitting an offer in compromise application that meets all the requirements is no guarantee that their proposed offer in compromise will be approved. Meeting these requirements gets the IRS to consider the proposed offer, but the agency still has the discretion to accept or reject it. There are various things the Internal Revenue Service looks at when considering whether to accept a given proposed offer in compromise.

So, many different things can impact whether a taxpayer is ultimately able to get the tax debt resolution they are seeking when they request an offer in compromise. Given how complicated offer in compromise matters can get and the long-term implications they can have for a taxpayer, a taxpayer may want a skilled tax attorney’s help when pursuing an offer in compromise.

Source: Internal Revenue Service, “Offer in Compromise,” Accessed May 27, 2016


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