One theme that seems to pop up time after time with my clients is they wonder how the IRS knows so much about their situation. They concoct crazy thoughts of “big brother” and the government being able to gather too much information about them.
Rather than believing in some large conspiracy, I tend to believe the IRS simply orders a credit report for the taxpayers who submit an offer in compromise. They can find out a lot of information about client’s credit, credit accounts, real estate they own and have owned in the past.
Therefore, I will urge you to check into your credit report before you file an offer in compromise so you can have an idea of what the IRS is going to see when they order a credit report. If there are things on your credit report that do not belong you should begin the process of having that removed with the credit bureaus. The good news is that you can obtain your credit report for free once a year from the credit bureaus.