IRS May Increase User Fees for Offers in Compromise

Posted on October 21, 2016

An Offer in Compromise is when taxpayers “cut a deal” with the IRS regarding your unpaid tax liability. There are three different types of Offers, namely Doubt as to Liability (“I don’t owe what the IRS says I owe”), Doubt as to Collectibility (“I can never pay the IRS what it says I owe”) or Effective Tax Administration (“I can pay the tax liability in full but to do so would cause a hardship”).

The IRS currently charges a user fee in the amount of $186 to file an Offer in Compromise. However, the IRS recently proposed increasing the cost of the user fee for filing an Offer in Compromise to $300, starting February 27, 2017. In certain circumstances, the IRS can waive the fee for filing an Offer in Compromise, usually for low-income taxpayers on Offers based on Doubt as to Liability.

Patrick T. Sheehan, the principal and owner of Patrick T. Sheehan & Associates, was formerly an attorney for the IRS. When he worked for the IRS, one of his jobs at the IRS District Counsel level was to accept or reject Offers in Compromise.

“Our Offer in Compromise acceptance rate with the IRS is unparalleled,” Sheehan said. “Before filing an Offer, we ensure that our clients are eligible to file an Offer in Compromise in order to obtain the best deal for them. Further, we ensure that our clients can fund any accepted Offer so that, if accepted, the Offer in Compromise will go through,” said Sheehan.

If you have an unpaid liability due to the IRS, call us, we can help.