IRS Settlement Offer - The Really Good and Not So Good

There are many pros and cons to deciding whether an offer in compromise is the right way to receive tax forgiveness. One thing is for sure: An IRS settlement offer is not for everyone. There are many factors to think about before attempting to settle with the IRS.

A successful Offer in Compromise will definitely put a smile on your face and have you jumping for joy (the IRS said yes and forgave your tax debts are over!).

IRS Settlement Offer - IRS Tax Relief

When you have the IRS garnishing wages, when you have a need an IRS settlement offer, your IRS tax relief solution is the best IRS help team at Flat Fee Tax Service, Inc. Our IRS Tax Lawyers will protect you as our experienced team of IRS tax professionals works on your Offer in Compromise.

Like the IRS in general, an IRS settlement offer can leave you a little frustrated as it requires an understanding of how to navigate through the Offer in Compromise guidelines that often have no fairness or reason.

What you need to know is what to expect, and to make a fully informed decision about whether the IRS settlement offer process is right for you.

Here are the "really good" and the "not so good" IRS settlement offer issues:

The really good:

a. An IRS settlement offer can be as advertised – complete tax relief from your IRS debt.

b. No more looking over your shoulder with fear of an IRS garnishment of wages, bank accounts or tax liens.

c. Improve your credit score. After an offer in compromise is complete, the IRS will release all tax liens filed against you.
IRS enforcement collections are put on hold while the IRS settlement offer is investigated. After the Offer in Compromise is accepted, you will have peace from IRS certified mail letters, no more IRS garnishments and no more visits from IRS Revenue Officers.

d. You have a "Fresh Start" and can put the IRS behind you. You can buy a house, a car, and save for retirement.

The "not so good":

a. The IRS will do a comprehensive investigation of your finances before settling, requiring completion of their Form 433A or 433B to disclose your income, expenses, and assets.

b. You will have to tell the IRS where you work and bank, and list your assets, including your house, cars, valuables and retirement accounts.

c. Verification will be required, including an IRS review of your paystubs, tax returns, bank statements, business profit and loss, and proof of payment of your monthly bills.

d. While an offer in compromise is being investigated, the IRS clock to collect from you (10 years), stops running. In that regard, it can be a bad idea to submit an IRS settlement offer when only a few years remaining for the IRS to collect.

e. After acceptance, the IRS will put you on a five-year probation, requiring full compliance in filing your tax returns on time and payment of all taxes. Not performing to IRS expectations going forward will default your IRS settlement offer.
The "really, really not so good":

An Offer in Compromise is not a quick fix. An IRS settlement offer can take the IRS a minimum of 9-12 months to investigate, with another 6 months if an appeal is needed; the IRS then allows 5-24 months to pay the settlement.

The IRS has guidelines that can impose their will over your on budgeting matters. Do you have credit card payments, or have a high monthly mortgage or car loan? Forget it, the IRS may want that money in their settlement calculations.
If the IRS determines they can collect the amount you owe, your Offer in Compromise will be rejected (with appeal rights).

The IRS settlement offer is not based on fairness but collectibility of the debt.

The IRS most recently rejected approximately 60% of the Offer in Compromise submissions it received. The IRS will receive 80,000 IRS settlement offers every year in and year out. Funny how the TV ads don’t mention that.




It is easy to be lead to believe how simple an Offer in Compromise is. Make no mistake, an offer in compromise can be a wonderful way to rid yourself for good of the IRS.

Hopefully, knowing about all aspects of an IRS settlement offer can help you make the right decision to move forward in a way that is in your best interest.



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Flat Fee Tax Service

3200 4th Ave., Suite 208,

San Diego, CA 92103

Phone. 800-589-3078