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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13317
Experience:  15years with H & R Block. Divisional leader, Instructor
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I fell behind in my income taxes and have been in various payment

Customer Question

I fell behind in my income taxes and have been in various payment plans with the IRS. I am once again unable to meet the payment amount. I owe about $10,000. I have been working on this for 3 years. Would the IRS be open to receiving a much lesser amount, same a lump some payment of $3000 as payment in whole? At the rate I am going I will be paying on this forever. And my mom has offered to put up the lesser amount if it completely closed the debt.
Submitted: 3 years ago.
Category: Tax
Expert:  Robin D. replied 3 years ago.

Robin D :

Hello and thank you for using Just Answer,
What you are purposing is an Offer in Compromise. An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship.

Robin D :

They generally approve an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time.

Robin D :

The amount is determined by all information so I can not tell you f the $3000 would be accepted or not.
Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.

Robin D :

Your initial payment will vary based on your offer and the payment option you choose:

  • child">Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
  • Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.
Robin D :

OIC Offers require a $150 application fee.

Robin D :

You do have another option. If you are not able to pay and have no income you can request to be placed on Currently Not Collectible Status.
The status of “Currently Not Collectible” essentially means that you do not have the financial means to repay the tax debt. Not that you are impoverished. This is common for those on a fixed income, yet more people these days are finding they do not even have the funds to meet a basic standard of living.

Robin D :

You can call the number on your last notice and ask about the CNC.

Robin D :

You'll find step-by-step instructions and all the forms for submitting an offer in the Offer in Compromise Booklet, Form 656-B .

Robin D :

Please let me know if you need clarification on any of the options spelled out above.

Robin D :

Hi

Robin D :

Did you have any other questions that I did not address about the OIC or the CNC (which may be your better chance)?

Robin D :

The system showed you were In CHAT. 4:06

Robin D :

If you have more question I want to address those.

Robin D :

On the chance that you could not actually view the full post when you returned (Customer Last Viewed Today at 4:06) I am changing this to the regular Q&A mode.

Robin D :

We will not be allowed to CHAT in real time but I would not want to think you could not view the full answer when you came back last.