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Putting an offer in compromise forward
As the name suggests, an offer in compromise refers to a settlement plan put forth by a taxpayer. When the taxpayer's ability to pay the debt proves questionable, the IRS might accept a lump sum payment on a portion of the balance due. Sometimes, the IRS allows a taxpayer to complete an OIC in several payments. Be mindful that interest and penalties continue to accrue on any remaining balance until the obligation is paid in full.
Not everyone qualifies for an offer in compromise plan. An IRS representative will review all submitted documents to determine eligibility. Taxpayers must submit a specific form designed to initiate a formal request for an OIC, and the form would require details about the taxpayer's current financial situation. If the IRS feels the person cannot repay the debt, the agency might accept the OIC.
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