The IRS Offer in Compromise program allows qualified taxpayers an opportunity to settle their back tax debt for less than what is owed. When you submit an Offer in Compromise you are agreeing to comply with certain terms and conditions. These terms and conditions remain in force while the IRS is reviewing your offer information and for five years after acceptance. Your failure to meet the offer terms may result in the IRS rejecting your offer in compromise, or if accepted, subsequently terminating the offer.
The following are some of the more important terms and conditions you agreed to when submitting your Offer in Compromise.
The IRS will keep your required payments either way.
Even if your offer is rejected, the IRS will keep your application fee, your initial payment and any required periodic payments you submit while the IRS is reviewing your offer. The payments you make will be applied to your outstanding tax debt. The IRS will decide how to apply your payments to outstanding debts unless you provide instructions.
The IRS will keep your refunds.
If you are owed a refund for any tax period up to and including the year that the IRS accepts your offer, the IRS will keep the refund. You cannot elect to apply this refund to your offer amount or future tax debts. If you receive a refund in this period, you must return it to the IRS.
The IRS will not return collected funds.
If the IRS has already collected money from you before receiving your offer, the money will not be returned. The IRS can continue to collect from you up until your offer is officially accepted for processing.
You must appeal within 30 days.
If your offer is rejected, you must request an appeal hearing within 30 days of notification. Otherwise, you waive your right to an appeal.
The IRS can still file a lien.
While the offer is being reviewed, the IRS can still file a Notice of Federal Tax Lien. If the offer is accepted, the lien will be released when you have made all of the required payments.
You must continue to file and pay taxes.
You must file and pay your taxes as required by law for a five-year period beginning on the date your offer is accepted. If you do not, you will have violated the agreement, and the IRS can collect the remainder of what you owe.
Once accepted, the offer is binding.
Once the IRS accepts your offer, you cannot challenge any of the tax debts included in the offer in court, nor can you file a refund claim for any included debts. You remain responsible for your full tax liability until you have met all of the terms of the offer. If you don’t satisfy one or more these terms, the IRS can collect the full amount of your original liability plus penalties and interest from the date you default.
Individual offer for a joint liability.
If you submit an offer on your own for a joint liability and your offer is accepted, the other liable party is not released or discharged from the tax debt.
East Coast Tax Consulting Group
For more information on the Offer in Compromise program or other tax relief strategies call East Coast Tax consulting Group today at 866-550-7655 to schedule a free consultation with one of our tax resolution experts. Our offices are conveniently located in Boca Raton, Plantation and West Palm Beach.