A transaction offer is a great way to resolve your tax debt when there are reasonable doubts about your ability to fully pay off the debt before it matures. But if an ICO isn't the best option for you, a tax professional can help you explore all other alternatives. Taxpayers who don't meet these estimates may find that they don't qualify or that they're being offered a higher offer amount that they can't afford in the future. While IRS payment plans or installment agreements can help you pay your full tax debt over time, a transaction offer is the closest anyone can get to full IRS debt forgiveness.
IRS public inspection files on transaction offers include the taxpayer's name, city, state, zip code, amount of liability, and terms of the taxpayer's offer. Find the forms for submitting an application and step-by-step instructions in Form 656-B, commitment offer brochure in PDF. The agency suggests that taxpayers “explore all other payment options before submitting a transaction offer. In general, the IRS only accepts offers that are equal to the maximum amount you could pay within a reasonable period of time.
Net realizable capital in assets and monthly disposable income calculations incorporate many complicated rules that you must follow to correctly determine your OCI rating and the amount of the offer. The IRS can file or maintain current tax liens until it accepts your offer and you have fulfilled your end of the deal. If a transaction offer is not for you, or if the IRS rejects your transaction offer, you may still have other options through the IRS to obtain tax relief, such as signing up for an installment payment plan or applying for “not currently collectible” status. This amount is called the offer amount and represents an estimate of how much the IRS will accept to settle a tax bill.
If you make a transaction offer based on the second or third reason, the IRS will consider other factors. But since we generally make money when you find an offer that you like and that you receive, we try to show you offers that we think are right for you. When you request a transaction offer, you are responsible for completing and including several forms. If you don't qualify for a transaction offer or if your offer is rejected, seek debt solutions, such as liquidation and consolidation.
In general, if you're not absolutely sure that the IRS will approve your OCI with the amount of the proposed offer, the ICO can be an expensive and unfeasible solution.