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IRS to taxpayers: Let’s make a deal

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in Small Business Tax

Are you at loggerheads with the IRS over a tax return from years ago? It may be weighing on your mind, but there’s a way you can put the matter to rest for good.  

Strategy: Make the IRS an offer it can’t refuse.

The technical name given by the IRS for such an arrangement is an “offer in compromise” (OIC).

The IRS is generally willing to go along with a deal, but it won’t budge on the procedures.

Here’s the whole story: An OIC is an agreement between a taxpayer and the IRS  settling the taxpayer’s tax liability for less than the full amount owed. If the liability can be fully paid through an installment agreement or other means, the taxpayer generally isn’t eligible for an OIC.

To qualify, the taxpayer must have filed all tax returns, made all required estimated tax payments for the current year and deposited payroll taxes for the current quarter if he or she is a business owner.

Generally, the IRS won’t accept an OIC unless...(register to read more)

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