Can’t Pay Your Taxes? Late In Paying?

Michael Lodge

by Michael Lodge

When you owe taxes it is very hard for some people to get the taxes paid.  Everyone seems to be living on a fixed budget and adding a new payment to their budget for taxes owed makes it hard.  So what can you do?  Let’s talk about an “Offer In Compromise”.

Question: I am unable to pay my delinquent taxes. Will the IRS accept an offer in compromise?

Answer:

You may qualify for an offer in compromise (OIC) if you are unable to pay your taxes in full, or are facing economic hardship or other special circumstances. Refer to Tax Topic 204 – Offers in Compromise, for more information.

The following details the application process and the items you need for consideration of your application:

  • Complete the application using Form 656, Offer in Compromise.
  • You must include the non-refundable $186 application fee with your offer. If you are requesting a low-income exception to the fee, complete Section 4 of Form 656.
  • See Step 6 on page 4 of the Form 656-B, for more information on the required initial payment and application fee.
  • See Steps 2 and 3 on page 4 of the Form 656-B to determine if you must include either:
    • A completed Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals, or
    • A completed Form 433-B (OIC), Collection Information Statement for Businesses.
  • Form 656 and referenced collection information statements are available in the Offer in Compromise Booklet, Form 656-B.

If your application is rejected and you are unable to pay your delinquent taxes in full at the time, you may still be eligible for other payment options.

If you need tax help – contact our office at:  877.778.1770