Answer: An Offer in Compromise is the IRS’ tax resolution debt settlement program. It’s a program for taxpayers who owe the IRS more money than they can afford to pay. It’s the IRS’s version of a “fresh start” when it comes to tax debt. If approved, the IRS accepts a lesser amount (sometimes a fraction of what’s owed) to settle your debt. However, it isn’t always easy to gain approval due to its strict criteria.
The IRS considers your income, assets, expenses, ability to pay, and whether paying the full amount would cause financial hardship. It’s important to remember that the IRS wants its money and will only accept an Offer in Compromise if it thinks it wouldn’t receive any money otherwise.
Your odds for acceptance increase significantly when you have an experienced negotiator dealing with the IRS, like a CTRS or an EA.
A certified tax resolution specialist (CTRS) is a tax expert who helps clients deal with tax issues and represents them before the Internal Revenue Service (IRS).
An Enrolled Agent (or EA) is a tax advisor who is a federally authorized tax practitioner empowered by the U.S. Department of the Treasury. Enrolled agents represent taxpayers before the Internal Revenue Service (IRS) for tax issues including audits, collections and appeals.
The Enrolled Agent status is the highest credential awarded by the IRS. The EA credential is recognized across all 50 U.S. states. Attorneys and certified public accountants (CPAs) are licensed on a state by state basis, and are also empowered by the Department of the Treasury to represent taxpayers before the IRS.