* What Is The Offer Of Compromise?
Simply put, an Offer of Compromise is a settlement with the IRS that comes in three forms. Instead of the full amount, the taxpayer agrees to make a single lump sum payment in exchange for a wipe of their original tax liability. The three forms the IRS recognizes are Doubt as to Liability, Effective Tax Administration, and Doubt as to Collectability. The IRS may decline an Offer of Compromise based on financial analysis of the applicant. The ability of the taxpayer to pay their obligation is measured by their reasonable collection potential (RCP).
In the event that the Offer of Compromise is rejected, the taxpayer does have the right to appeal the IRS's decision.
* The Requirements For An Appeal
Appealing a rejected Offer of Compromise can be a difficult process and there are specific criteria that must be met to appeal at all.... ...read full post