Question: I’ve heard all the stories about an Offer in Compromise. I’m almost certain it won’t work for me. While my tax debt is substantial — $29,000 — I still make a living good enough to pay off the debt. I just can’t cut a check tomorrow. What can I do?
Answer: While it’s possible that you may be ineligible for an Offer in Compromise, you should consult a qualified tax professional before you automatically write off the option. If indeed you are eligible for an Offer in Compromise, you should, by all means, take advantage of it.
However, for the sake of answering your question, let’s assume that your assets and income are too substantial, making you ineligible for an Offer in Compromise. You still have other options to alleviate your tax debt.
One of your best options is to enter into an Installment Agreement. Like the Offer in Compromise, an Installment Agreement is not eligible for everyone. But assuming you can prove to the IRS that, though you can’t pay off the debt right now, you can pay it off over time, then it’s likely the revenue officer will agree to allow you to participate.
Here’s how it works: Your qualified tax professional and the revenue officer handling your case will come up with a monthly payment that will satisfy your debt overtime without significantly altering your lifestyle. The monthly payment works very much like a mortgage or car-loan payment. You’ll notice that it’s there, but you can still send your kids to college and go out for a decent meal on Saturday evening.
With the Installment Agreement, you can soon satisfy the debt that’s been hanging over your head for some time. It’s that simple.