Offer in Compromise Alternatives

Alternatives To An Offer In Compromise

The offer in compromise program is not for everyone. The eligibility requirements are strict, and the evaluation criteria make acceptance of an offer unlikely for most taxpayers. If you are not a good candidate for an offer in compromise or your offer has already been rejected, you situation is not hopeless. You still have options for dealing with your tax debt.

Installment Agreement

The first and most likely alternative is to set up an installment agreement with the IRS. This is an arrangement that allows you to make monthly payments over a fixed period of time, during which the IRS will not take any further collections actions against you — including bank account levies and wage garnishments. For tax debts under $100,000, the IRS is generally fairly willing to accept the smallest monthly payment that will result in the liability being paid off within six years. For amounts greater than $100,000, the IRS often expects taxpayers to pay as much as they can afford — in addition to selling assets like second cars and collectibles. This often requires considerable negotiation to reach a payment that is both acceptable to the IRS and affordable by the taxpayer.

Non-Collectible Status

For certain individuals, it may be possible to suspend all IRS collections activity without making any monthly payments. This is called “non-collectible” status. It is available to taxpayers who are experiencing a financial hardship buy do not otherwise qualify for an offer in compromise. The non-collectible status will last for a period of 6 to 12 months before the taxpayer’s financial situation is re-evaluated.

Bottom Line

An experienced tax attorney can help you navigate the offer in compromise program and decide on an alternative that is best for you in the event you don’t qualify for an offer acceptance. Contact us if you’d like to speak with a tax attorney in Reno, Nevada about your case.

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

  • Overview of the Offer in Compromise Process
  • Eligibility Requirements
  • The Offer Amount
  • How the IRS Decides to Accept or Reject an Offer in Compromise