I thought the IRS Offer in compromise is the very best program to get rid your IRS tax debt?

The offer in compromise program is a program where you offer the IRS a certain amount and they forgive whatever else you do owe them.

Why wouldn't this be the best program for you? There might be about five different situations why this program is not a great fit for you.

The IRS offer in compromise program ( the one that I'm talking about) is known as “doubt as to collectibility”, where the IRS will not have a chance to collect whatever you do owe them in full. So you make an offer, and if the IRS accepts your offer, the rest of the back taxes are forgiven.

The first reason the IRS OIC is not the best Tax Relief program for you is, that your income is too high. You calculate the OIC on IRS FORM 433-A (OIC), and if your income exceeds your expenses for a certain amount, then you just don't qualify.

The second reason why you may not qualify is because maybe you have too much equity in an asset. So this happens to be either a house, cars, cryptocurrency, you name it. In a situation like this, you may not have a high monthly disposable income, but this equity and asset will definitely disqualify you from qualifying for this program.

The third thing to keep in mind is you got to keep in mind the IRS really only has 10 years to collect on the balance that you do owe. The clock starts ticking on this 10 years the moment that you're assessed this balance, the moment that this balance becomes processed by the IRS. So if that date is kind of nearing its end, this offer in compromise program may not be the best solution, because of the nearing collection statute expiration date

The fourth thing to consider is regarding that date, if you're unsuccessful in filing this offer in compromise, meaning that you go through this process, it gets rejected. You go through appeals and also the appeals sustains the rejection, you have to have extended the collection statute expiration date.

The fifth thing to consider is that there might be another alternative program than the IRS Offer in Compromise that might be a better fit for you.

These alternative programs might be a partial paying installment plan, where you could only pay what you could afford, the non-collectible program, or it could be one of the other many reasons how you could fix your tax problems, evaluating everything that could be taken, such as if you never showed up for an audit, you could do an audit reconsideration. Maybe it was a mistake on a tax return, an amended tax return, or maybe you qualify for the innocent spouse relief. So that is always something to consider. And those might be a better reason why than to file the offer in compromise program.

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