If you are a reader of our blog, you almost certainly are someone who owes back taxes (or hasn't filed) and is looking for the best way to resolve your issue. Let's get a few things out of the way...if you are being chased by private tax debt collectors, you can relax. They don't have the power to levy. But what if the IRS is pursuing you? That is a bit more urgent.
With the IRS gears moving a little slower during the pandemic, this could be an ideal time to submit an Offer in Compromise. We like to submit Offers a little before collections heats up...why? Because when an Offer is submitted, the collections process is turned off. So, when collections reemerges to help pay off our trillions in government debt...your case will be nicely tucked in away in the Offer in Compromise division.
When should you file an Offer?
If you can't pay the IRS back at your "current" rate of income, then you just might be a candidate.
If you don't have the assets to liquidate to pay the IRS, you just might be a candidate.
When should you NOT file an Offer?
Your debts are old and might expire in the next year or two.
You have the ability to pay the IRS back rapidly thru your current income.
You have the assets to liquidate to pay the IRS. (Remember the key is "liquidate," some assets are not easily dispersed.)
If you can't do an Offer, what should you do?
Set up a payment plan, make them as livable as possible, submit them as late as you can.
Sometimes. Nothing. Wait for your debt to expire.
Pay the IRS off and ask for a penalty waiver.