The IRS has a new tool that will let taxpayers check to see if they are eligible for an Offer in Compromise (OIC) and get a preliminary offer amount if they do qualify..
The Offer in Compromise program allows taxpayers to make a counter offer to pay their IRS debt. This isn’t a “pennies on the dollar” program like you see on late night TV. A taxpayer can qualify to pay a reduced amount by showing that they really can’t pay the full amount or if they can show that there is a real question that they owe the money. Most taxpayers take advantage of the OIC because they believe that they can’t pay the debt.
The OIC application process requires the taxpayer to complete an extensive financial report listing all assets, living expenses and debts. Too often, they spend hours filling out the form to discover that they don’t qualify for the program. The new online tool will allow the taxpayer check if they qualify before they fill out the form.
I haven’t had a chance to try the program yet so please let me know how it does.
FYI - THe OIC Tool Link has been updated.