If the IRS is contacting you because you owe outstanding taxes — maybe your business had a banner year and you didn’t put aside nearly enough to pay, for instance — you may feel like the total is a bit daunting.
How can you possibly pay it all back at once? If you don’t have the money, is that the end for your company? What options do you have? It may be time to consider an offer in compromise.
What is an offer in compromise?
Rest assured that there are always options. No matter how bad the situation feels, you can find a solution. One potential option is looking into an offer in compromise to try to reduce the total amount that you need to pay.
An offer in compromise means that they offer to let you pay less than what you owe to the IRS, but they will still allow that smaller amount to eliminate your tax debt. Maybe you’re looking at $200,000 owed, for instance, but you only have around $80,000 on hand. Anything more would bankrupt your company. If the IRS extends an offer in compromise for $80,000, you can settle this without having to come up with the rest.
One thing to note is that the IRS won’t provide this opportunity to everyone. If they decide an installment plan would be better, for instance, you may not qualify for the offer in compromise.
Exploring all of your options
As you can see, you may have more options for dealing with your taxes than you realized. Make sure you really take the time to explore them all carefully. An experienced advocate can guide you through the process and protect your interests.