Tax Tip 2023-58
\nApril 27, 2023<\/p>\n
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When a taxpayer can’t pay their full tax liability or if paying would cause financial hardship, they may want to consider applying for an Offer in Compromise<\/a>. This agreement between a taxpayer and the IRS settles a tax debt for less than the full amount owed. The goal is a compromise that\u2019s in the best interest of both the taxpayer and the agency. The application fee for an offer in compromise is $205. Low-income taxpayers don\u2019t have to pay this fee, and they should check if they meet the definition of low-income in the instructions for Form 656, Offer in Compromise<\/a>.<\/p>\n <\/p>\n When reviewing applications, the IRS considers the taxpayer’s unique set of facts and special circumstances affecting their ability to pay including their:<\/p>\n <\/p>\n <\/p>\n The Offer in Compromise Booklet has detailed information<\/strong><\/p>\n The booklet covers everything<\/a> a taxpayer needs to know about submitting an Offer in Compromise including:<\/p>\n <\/p>\n <\/p>\n The booklet is also available in Spanish. Taxpayers should download and use the latest version of the OIC booklet to avoid processing delays.<\/p>\n <\/p>\n Taxpayers can also watch a how-to video series on Offer in Compromise<\/strong><\/p>\n The IRS has a free how-to\u00a0video series<\/a> on Offer in Compromise available in English, Spanish and Simplified Chinese. The playlist has easy-to-find information that taxpayers need to know when they consider and apply for an OIC. Topics in the series include:<\/p>\n <\/p>\n\n
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