Can I File An Offer in Compromise Immediately?
QUESTION:
I already owe the IRS about $25,000 and I will owe about $4,000 this year. I want to try to get the IRS to settle for less money as soon as possible. Can I include this year’s taxes that I will owe?
ANSWER:
What you are asking is for the IRS to accept an offer in compromise where you offer to pay less than what the IRS says you owe for a full and final settlement of your tax liability. The IRS is required to compromise ALL of your assessed tax liabilities when they agree to an offer in compromise. In your case, however, you are asking that the IRS compromise taxes that you will owe for this year, but they have not yet been assessed because the taxes are not assessed until April 15, 2008. I also like to point out that an offer in compromise is a contract between the taxpayer and the IRS. You, as the taxpayer, agree to stay current with estimated tax payments so you will not owe any additional money each year for at least five years. Even if you file an offer in compromise right now, the IRS will not accept it because you will automatically default on your agreement in April when taxes are assessed and you have a balance due for the current year. If you want to file an offer in compromise immediately, you will need to get your current year taxes paid somehow and get on the right track for next year immediately.