Q. I owe IRS money, should I get a third party to help me file OIC application?
A. Be very careful when you seek a third party to help get instant tax relief, especially the ones asking for thousands of dollars in upfront fees.
If you have trouble paying IRS, after exhausting other payment options, consider the IRS' Offer In Compromise (OIC) program, but you don't have to pay other people to apply it for you.
IRS Offer In Compromise Program
You can apply for OIC on your own - use IRS' pre-qualifier tool at irs.gove to find out whether you are eligible. An OIC requires a nonreundable $186 application fee, unless you meet the low income qualification. You will find instructions and the forms for submitting an offer in IRS Form 656 Booklet: Offer in Compromise.
To qualify for OIC, you have to show that you can't pay your full tax liability because it will cause a financial hardship (IRS will assess it based on your income and assets to determine your ability to pay). IRS generally approves an OIC when the amount offered represents the most it can expect to collect within a reasonable period of time. The approval rate for OIC applications was 42% in 2013 (38% in 2012).
Note, if your are not current with filing your returns, your application will not be accepted, that's why we stressed the order to pay IRS is important. You are not eligible if you have an open bankruptcy case.
IRS Online Payment Agreement
Finally, IRS has improved its help for struggling tax payers. If you owe $50,000 or less, you can set up a payment agreement and pay off your debt within six years without having to submit a financial statement, and it can be done online. You can set up an installment agreement which requires an one time $120 set up fee (reduced to $52 if you pay through a direct debit from your bank account). With the online payment agreement, you don't have to call IRS or visit its office, but if you need help, you can call IRS at 800-829-1040.
A. Be very careful when you seek a third party to help get instant tax relief, especially the ones asking for thousands of dollars in upfront fees.
If you have trouble paying IRS, after exhausting other payment options, consider the IRS' Offer In Compromise (OIC) program, but you don't have to pay other people to apply it for you.
IRS Offer In Compromise Program
You can apply for OIC on your own - use IRS' pre-qualifier tool at irs.gove to find out whether you are eligible. An OIC requires a nonreundable $186 application fee, unless you meet the low income qualification. You will find instructions and the forms for submitting an offer in IRS Form 656 Booklet: Offer in Compromise.
To qualify for OIC, you have to show that you can't pay your full tax liability because it will cause a financial hardship (IRS will assess it based on your income and assets to determine your ability to pay). IRS generally approves an OIC when the amount offered represents the most it can expect to collect within a reasonable period of time. The approval rate for OIC applications was 42% in 2013 (38% in 2012).
Note, if your are not current with filing your returns, your application will not be accepted, that's why we stressed the order to pay IRS is important. You are not eligible if you have an open bankruptcy case.
IRS Online Payment Agreement
Finally, IRS has improved its help for struggling tax payers. If you owe $50,000 or less, you can set up a payment agreement and pay off your debt within six years without having to submit a financial statement, and it can be done online. You can set up an installment agreement which requires an one time $120 set up fee (reduced to $52 if you pay through a direct debit from your bank account). With the online payment agreement, you don't have to call IRS or visit its office, but if you need help, you can call IRS at 800-829-1040.
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