An OFFER IN COMPROMISE allows you to cut a deal with the IRS to pay less than what you owe, often for pennies on the dollar. An Offer in Compromise is filed with the IRS on a Form 656. Not all taxpayers are eligible for an Offer in Compromise. A thorough financial analysis must be performed to determine whether an Offer in Compromise is appropriate for you. A taxpayer's financial condition is disclosed to the IRS on a Form 433-A and/or Form 433-B financial statement.

There are three types of Offers in Compromise. Each type of Offer is discussed below:

DOUBT AS TO LIABILITY

Doubt as to Liability is used where the amount the IRS is seeking to collect is incorrect. A taxpayer does not need to disclose his or her financial condition to the IRS with this type of Offer.

DOUBT AS TO COLLECTIBILITY

If a taxpayer cannot pay his tax liability in full, he may be eligible for an Offer in Compromise based upon this ground. A thorough financial analysis of the taxpayer is performed to determine whether the taxpayer is eligible for this type of Offer. If eligible, we determine the general dollar range that the IRS may be willing to accept. This program is a wonderful way to eliminate one's tax liability for pennies on the dollar.

EFFECTIVE TAX ADMINISTRATION ("HARDSHIP")

When a taxpayer actually has the ability to pay his or her liability in full, but to do so would cause a significant hardship, an Offer in Compromise under this ground may be appropriate. Although this ground exists on the books of the IRS, the IRS' acceptance of this type of Offer is fairly rare.

AN OFFER IN COMPROMISE is based upon many different factors including, but not limited to, the taxpayer's age, health, income, assets and liabilities. All of these items are factored into a mathematical model to determine the taxpayer's eligibility for an Offer and, if eligible, the amount the IRS may be willing to accept under that Offer.

While an attorney for the IRS, Mr. Sheehan recommended the acceptance or rejection of Offers in Compromise at the IRS District Counsel level. Since our inception in 1991, very few of our Offers in Compromise have been rejected. Patrick T. Sheehan & Associates, Attorneys at Law, P.C. is well suited to determine your eligibility for an Offer in Compromise and, if eligible, to file one for you. Let our many years of experience help you solve your IRS matters. If you are interested in an Offer in Compromise, please call us.