“Can You Pay Off Tax Debt Before it Expires?” - Part 2 of 3 Part Series on OIC Rule Changes for 2015

"Can You Pay Off Tax Debt Before it Expires?" Well - if you can answer NO to this question - you just might be a candidate for an Offer in Compromise tax settlement! Forget about sales pitches from tax relief companies or fancy "pennies-on-the-dollar" figures -"settle for 10%, etc."-- the most important question to qualify for the IRS Offer in Compromise is answering that question. Let's break it down here for you:

"Can you Pay Off what you owe the IRS before the Debt expires?"    

A Two Part Question:

One: When does your Debt Expire? 

If you owe the IRS for 2013, for example, and just filed the tax return on October 15, 2014, well your tax debt is going to expire in 10 years or 120 months. It doesn't matter if you owe for older years. The most recent tax year is the important one. If you owed for 2011, filed it on time in 2012 and that is the most recent year owe, then your debt will expire in Oct. 2022 for example or in eight years.

Two: Can you Pay it Back before it Expires?

If you owe $50,000 for tax year 2013, can you pay it back in 10 years? If you can, well you probably don't qualify for an OIC. If you can't, however, then you just might be a candidate. Divide $50,000 by 120 months or ten years and you will need to pay $417 a month to pay it back. If your disposable income is less than that - say $300 - well you just might be a candidate!

If you can't pay the IRS back in time, well - you multiply the $300 by 12 months and "potentially" you can settle your IRS debt of $50,000 for $3600.00.  (Many factors also go into this like 1. what your assets are 2. whether your monthly expenditures are "allowable" or not). But generally speaking it's this simple.

Please continue to Part 3: "New Offer in Compromise Rules In Action. Case Example: $1.7 Million Owed." of the 3 Part-Offer in Compromise series HERE.

You can reach our tax experts directly by calling or emailing:
Portrait of Jay Freeborne
Jay Freeborne
Enrolled Agent and Tax Resolution and Compliance Expert
(866) 525-7302 or [email protected]
Portrait of Stephanie Johnston
Stephanie Johnston
Enrolled Agent, Tax Resolution & Expat Expert
(866) 525-7321 or [email protected]

Is 2024 the year to solve your tax issue? WATAX is ready to assist you now. Please call us at 1-888-282-4697 or email us a description of your tax issue and we'll contact you promptly.

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