Jimenez & Associates, Inc. assists taxpayers in filing an Offer in Compromise with the IRS. Many taxpayers have false expectations in regards to an Offer in Compromise due to
advertisements from companies that provide this service making them think they can settle IRS debt for pennies on the dollar and this couldn't be further from the truth. Please read below to
see if you meet IRS guidelines and criteria.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a
financial hardship. The IRS considers your unique set of facts and circumstances:
- Ability to pay;
- Expenses; and
- Asset equity.
The IRS generally approves an offer in compromise when the amount offered represents the most it can expect to collect within a reasonable period of time. Explore all other payment options before
submitting an offer in compromise. The Offer in Compromise program is not for everyone.
Note to Pre-Qualifier Tool Users
We are in the process of making modifications to the Pre-Qualifier Tool application. If you use this tool,
please consider making the following adjustments to your displayed results.
- If you enter an amount on Screen 3 Assets, Line 1 which reads "Total bank Balances," you may reduce this amount by $1000. The result may not be less than
- If you enter an amount on Screen 3, Vehicle 1, you may reduce this amount by $3450. The result may not be less than zero.
- If you enter an amount on Screen 3, Vehicle 2, and you are making a joint offer with a spouse or other party, you may also reduce this amount by $3450. The result
may not be less than zero.
Make sure you are eligible
Before the IRS can consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding. Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.
Submit your offer
Your completed offer package will include:
- Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms;
- Form 656(s) - individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656;
- $186 application fee (non-refundable); and
- Initial payment (non-refundable) for each Form 656.
Select a payment option
Your initial payment will vary based on your offer and the payment option you choose:
- Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer
in five or fewer payments.
- Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If
accepted, continue to pay monthly until it is paid in full.
If you meet the Low Income Certification guidelines, you do not have to send the application fee or the initial payment and you will not need to make monthly installments during the evaluation of
your offer. See your application package for details.
Understand the process
While your offer is being evaluated:
- Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);
- A Notice of Federal Tax Lien may be filed;
- Other collection activities are suspended;
- The legal assessment and collection period is extended;
- Make all required payments associated with your offer;
- You are not required to make payments on an existing installment agreement; and
- Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.
If your offer is accepted
If your offer is rejected
- You must meet all the Offer Terms listed in Section 8 of Form 656, including filing all required tax returns and making all payments;
- Any refunds due within the calendar year in which your offer is accepted will be applied to your tax debt;
- Federal tax liens are not released until your offer terms are satisfied; and
- You may appeal a rejection within 30 days using Request for Appeal of Offer in Compromise, Form 13711 (PDF).