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FAQS

Frequently Asked Questions

They serve as a convenient resource, offering clarity and guidance, ultimately enhancing user experience and reducing the need for repetitive inquiries.

Do I need professional help to manage an installment agreement or offer in compromise?

Professional guidance is strongly recommended. Advisors can structure an installment agreement or offer in compromise to fit your financial circumstances. They also prepare a written statement explaining hardship, calculate an estimated date for resolution, and ensure compliance with all legally required steps.

With professional help, taxpayers increase their chances of approval and avoid costly mistakes that may lead to denial.

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How long does the process take, and when is an acceptance letter issued?

The process may last 6 to 24 months, depending on the case. Simple cases with low-income certification may even be automatically accepted if requirements are met.

If approved, the IRS issues an acceptance letter confirming the terms. If the IRS rejects the offer, a rejection letter and an appeal period for the taxpayer to respond will be sent.

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What financial information is required, and how does the IRS evaluate your offer?

Applicants must provide detailed financial disclosure, including tax returns, bank statements, and records of living expenses. Business owners may also need to submit financial data from the two preceding quarters.

The IRS evaluates this information to determine whether the offer reflects the taxpayer’s reasonable collection potential. Missing documentation may result in delays or a return letter requesting additional information.

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When does collection protection take effect once the IRS accepts an application?

Collection protection begins when the IRS accepts a complete package, including the application fee and any initial payment. From that date, levies and garnishments are suspended while the proposal is reviewed.

Processing can take 6 to 24 months, depending on complexity. During this time, interest may continue to accrue until the offer is finalized or a final court decision is reached.

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Can I include multiple tax years in one IRS offer?

Yes, taxpayers can submit one IRS offer that covers multiple tax periods and obligations. This option allows settlement of different years at once, making it easier to resolve long-standing debts.

All required tax returns and estimated payments must be filed before the IRS evaluates the request. The settlement terms typically involve an initial payment, monthly payments, or, in some cases, an installment agreement.

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What is the difference between doubt as to collectibility and doubt as to liability in the compromise program?

Doubt about collectibility applies when taxpayers lack resources to pay within a reasonable period. This compromise program focuses on whether the IRS can recover the full balance based on income and assets.

Doubt as to liability arises when taxpayers dispute the accuracy of a legal assessment. In such cases, the IRS evaluates whether errors or miscalculations justify reducing the tax debt.

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What is an Offer in Compromise, and why is it important in cases of economic hardship?

An Offer in Compromise is a settlement option for taxpayers facing economic hardship who cannot pay the full debt. The program allows the IRS to accept less than the full liability while still collecting what is reasonable.

By providing accurate financial disclosure, including income and living expenses, taxpayers can show that paying the original debt in full would be unfair or impossible.

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Do I need professional help to establish a payment plan?

While most taxpayers can apply online or by phone, professional help is often valuable when dealing with high balances, complex debts, or accrued penalties. A tax advisor can help you structure the payment plan to minimize costs.

Professionals also ensure you provide additional information, complete the paperwork accurately, and avoid errors that could cause default. This guidance helps secure manageable terms and protects your financial stability.

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How long do payment plans last, and can they be modified?

Payment plans generally last until the full amount of the tax liability is satisfied or the statute of limitations expires. Some agreements may also end if the taxpayer defaults.

They can be modified under certain conditions, such as financial circumstances. Taxpayers may submit a written request to adjust terms, increase flexibility in payment options, or reduce their minimum monthly payment.

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What payment methods are available for installment agreements?

Taxpayers have several payment options, from traditional mail checks to electronic methods. The most convenient approach is to apply online and set up a direct debit payment plan, which ensures payments are withdrawn automatically.

Other methods include payroll deductions or credit card payments. Automatic methods generally make it easier to stay compliant with the agreement and reduce the risk of missed payments.

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Have Questions? We’re Here to Help

Start Your Free Case Review

Questions? We’re Ready to Assist!

Frequently Asked Questions

Require more information?

Don’t Wait Until the IRS Garnishes Your Paycheck.

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