There are several very strict requirements you must meet in order to qualify for an Offer in Compromise. According to the IRS you can compromise your back taxes by meeting one of the following requirements:

1. Doubt as to Collectability is when the IRS doubts that you would be able to repay your back taxes within the statutory period of collection.

2. Doubt as to Liability is when doubt exists that the assessed tax debt is accurate. There are several reasons to submit a Doubt as to Liability offer. Those include: (1) the assessor made a mistake when interpreting the law, (2) the assessor failed to consider the taxpayer’s evidence or (3) the taxpayer has new evidence to bring forth.

3. Effective Tax Administration is when there is no doubt that the tax debt is correct and there is potential to collect the full amount of back taxes, but an exceptional circumstance is present.  Circumstances like paying the full amount of you tax debt would create an economic hardship or be unfair and inequitable.

 Once your Offer in Compromise has been accepted by the IRS you will have the option to pay your back tax debt in one of three easy and convenient ways:

1. Lump Sum Cash Offer is payable in five or fewer non-refundable installments. The payments will begin when you have received written notice that your Offer in Compromise has been accepted by the IRS.

2. Short Term Periodic Payment Offer is payable in non-refundable installments. The offer amount must be paid within 24 months of the date the IRS received the Offer in Compromise.

3. Deferred Periodic Payment Offer is payable in non-refundable installments. The offer amount must be paid over the remaining statutory period for collecting the tax debt.