Offer in Compromise

Step 2: Getting Started

Are you a good candidate?

Before getting started, complete this pre-qualifier worksheet to make sure you have a decent chance of having an accepted offer. This tool is free and does not ask for any personal information. It will also help you understand the information you need to collect before starting your paperwork.

Did you complete your Discovery?

There is some information you need to gather from the IRS prior to starting an Offer in Compromise. Transaccts offers two options to help:

Terms to know

RCP= (your monthly income – your monthly expenses) + equity in assets.

National Standards includes housing expenses, food and other general living expenses, as well as out-of-pocket health care. These national standards will be included in your financial statements that we will be preparing later in this Roadmap.

Depending on how much you owe the IRS, how close your taxes are to expiring, or how badly the IRS wants to collect your back taxes, you might be assigned a Revenue Officer. The Revenue Officer is responsible for collecting your back taxes within a timely manner and generally means that you are far along in the IRS Collection Process.

An OIC might not be your best option! Here are a couple scenarios when you should consider a different route:

  • You believe there was a mistake on a tax return that caused you to owe taxes Contact us to discuss tax preparation. 
  • If the IRS prepared a tax return for you (SFR), a better option may be to just fix the inaccurate return.  Including legitimate expenses and deductions could help you have a better outcome. 
  • If your tax debt is expiring, then let it expire! Settling on expiring tax debt means you will still pay a portion of your taxes owed as opposed to letting the entire amount ‘fall-off.’

Information checklist

Personal Information needed for you (and spouse)

Full legal name

Date of birth

Social Security Number

Current home address

Bank account information

Investment information (stocks, bonds, IRA, 401k)

Personal Property information (home, vehicles, cash, motorcycle)

Monthly income

Monthly personal expenses

Credit Card availability and debt

Other debts (mortgage, secured loans, unsecured loans, State tax debt)

 

Business Information needed (for all businesses)

Business name

Business Address

Employer Identification number (EIN)

Business Asset Information

Business bank account information

Business credit card information

Business Profit and Loss Statement (income and expenses)

If you have a spouse or ex-spouse:

If you plan to settle back taxes for a year that you were married OR you are currently married, you might need to include their financial information on the financial statements and application, too.  Your offer amount could ultimately be affected by the additional income, expenses, or assets that your spouse or ex-spouse reports. Although your spouse might not be liable, their information might need to be reported.

If you are submitting an Offer in Compromise independently from an ex-spouse for a tax year which you have a joint tax liability (you were married filing jointly), your ex-spouse could still be held liable for the full tax debt if your offer is accepted.