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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7867
Experience:  15years with H & R Block. Divisional leader, Instructor
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My name is Beverly and want to know how I can get my Taxs

Customer Question

My name is XXXXX XXXXX want to know how I can get my Tax's payed in full by paying
half of what I owe IRS?
Please advise me on my quest to make things right as I have family that want to help
and can if my taxes I owe were half of what I owe.
Thank you,
Beverly
Submitted: 4 years ago.
Category: Tax
Expert:  Robin D. replied 4 years ago.

Hello and thank you for using Just Answer.

I am not sure that the IRS would accept a payment for half of what your tax debt is but what you are referring to is an Offer In Compromise.

An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer's tax liabilities for less than the full amount owed. If the liabilities can be fully paid through an installment agreement or other means, the taxpayer will in most cases not be eligible for an OIC.

In most cases, the IRS will not accept an offer unless the amount offered by the taxpayer is equal to or greater than the reasonable collection potential (the RCP). The RCP is how the IRS measures the taxpayer's ability to pay. The RCP includes the value that can be realized from the taxpayer's assets, such as real property, automobiles, bank accounts, and other property. In addition to property, the RCP also includes anticipated future income, less certain amounts allowed for basic living expenses.

The IRS may accept an OIC based on three grounds.

  • First, acceptance is permitted if there is doubt as to liability. This ground is only met when genuine doubt exists that the IRS has correctly determined the amount owed.
  • Second, acceptance is permitted if there is doubt that the amount owed is collectible. This means that doubt exists in any case where the taxpayer's assets and income are less than the full amount of the tax liability.
  • Third, acceptance is permitted based on effective tax administration. An offer may be accepted based on effective tax administration when there is no doubt that the full amount owed can be collected, but requiring payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.

In general, a taxpayer must submit a $150 application fee along with the Form 656.

If the IRS accepts the taxpayer's offer, the IRS expects that the taxpayer will have no further delinquencies and will fully comply with the tax laws. If the taxpayer does not abide by all the terms and conditions of the OIC, the IRS may determine that the OIC is in default. To avoid a default, the taxpayer must timely file all tax returns and timely pay all taxes for 5 years or until the offered amount is paid in full, whichever period is longer. When an OIC is declared to be in default, the agreement is no longer in effect and the IRS may then collect the amounts originally owed, plus interest and penalties.

 

If you meet the requirements then you may wish to look at the forms needed to file an OIC:

http://www.irs.gov/pub/irs-pdf/f656.pdf

http://www.irs.gov/pub/irs-pdf/f433a.pdf

 

I sincerely XXXXX XXXXX information is useful,

Customer: replied 4 years ago.

I am not satisfied with the answer as alrerady started up with I AM NOT SURE, is enough for me not to accept the answer so please stop. I don't want anymore and

want my $30 put back into my account.

Thank you, XXXXX XXXXX

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Robin D.
Robin D.
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15years with H & R Block. Divisional leader, Instructor