Eligibility Requirements for an IRS Offer in Compromise

Am I Eligible For An Offer In Compromise?

The Offer in Compromise program allows individuals and businesses to settle their tax liability for less than they owe. However, there are strict eligibility requirements that a person or business must meet before their offer will even be considered. If you have questions about the eligibility requirements for an Offer in Compromise with the IRS or State of ?Nevada, please contact our Reno, Nevada Office to speak with a tax attorney.

Eligibility Requirement #1: No Pending Bankruptcy

If you are currently in an open bankruptcy proceeding, you cannot submit an offer in compromise. Instead, you must address your tax debts within the context of your bankruptcy proceeding. Read: Discharging tax debt in bankruptcy for more information.

Eligibility Requirement #2: No Missing Returns

The IRS will not consider an offer in compromise if you have not filed all federal tax returns that you were required to file. This means that regardless of your ability to pay, you must still file your tax returns. Otherwise, you will be ineligible to settle your tax debt with an offer-in-compromise.

Eligibility Requirement #3: No Late Tax Deposits

If you own a business and are required to make quarterly payroll tax deposits with the IRS, you must be up to date for the current and previous two quarters. Otherwise, you are not eligible for an offer-in-compromise.

Eligibility Requirement #4: No Pending DOJ Investigation

If the IRS has referred your case to the US Department of Justice for possible criminal prosecution relating to tax crimes (such as tax fraud or filing a false tax return), you cannot submit an offer-in-compromise for any of the tax years covered by the DOJ investigation.

If you meet the four eligibility requirements listed above, then you can submit an offer in compromise to the IRS. This does not mean that your offer will be accepted, but at least the IRS will consider the merits of your offer and give you the chance to settle your tax debt once and for all.

More Information About The IRS Offer in Compromise

For more information on the IRS Offer in Compromise program, please see: