Whether or not you qualify for an IRS offer in compromise depends on many factors. While this is something that many taxpayers are interested in, not all of them qualify. In fact, only 10 to 15 percent of all offers are accepted.
If you are interested in an IRS compromise you must first determine your eligibility. If you feel that you can use this settlement method, you should feel comfortable moving forward.
Below are three circumstances in which an offer in compromise may be considered:

1. There is double that the money will be collected in the near future. The IRS classifies this as doubt as to collectability. During this process, the IRS will consider the following questions: will we be able to collect more through forced collections than by accepting a compromise? Does it make sense to let the taxpayer get his finances in order with the hopes of collecting in the future? Would other people feel that accepting an offer would be improper? If all of these questions are answered with a "no," there is a good chance that the IRS compromise will be accepted.


2. There is doubt that the assessed liability is correct. For example, an IRS examiner may have made a mistake when assessing the tax as well as penalties and interest. This is known as doubt as to liability.


3. Financial hardship. Would the taxpayer be put in a very bad financial position if the collection process begins? If so, the IRS may decide to accept an offer in compromise as opposed to forced collections. This is known as effective tax administration.

Does your situation match one or more of those listed above? If so, there is a chance that you may be eligible to have an offer accepted by the IRS. Here are several other requirements needed to qualify: cannot be going through bankruptcy; all federal returns must be filed; must pay the application fee of $150 for the offer to be processed; and all documentation must be submitted.
Are you confused? Are you having a difficult time determining if you qualify for an IRS offer in compromise? If so, you should hire a tax professional with past experience in this area of tax settlement. By getting professional help you can determine if you qualify for an IRS compromise while also moving forward with the process itself.
You are not required to hire a professional to submit an offer in compromise, but it definitely makes sense for most people. The assistance that you receive is well worth any money that you have to pay out.
What do you think? Do you qualify for an IRS offer in compromise? If you don't know the answer, speak with a tax professional. Either way, this allows you to settle your taxes for less than what you actually owe.
If you qualify for an IRS compromise, it makes good sense to consider this option above all others. Settling your debt for less than the total amount can quickly improve your tax and overall financial situation.