Offer in compromise allows you to negotiate tax bill reduction with the IRS. The IRS will review a couple of factors to determine your ability to pay. If granted a compromise, you can pay a tax bill at a smaller amount. IRS uses an online tool to verify your eligibility. It verifies if you've filed and paid all current tax, and federal tax deposits if you are a business with employees.
With some exceptions for low-income earners, the application fee costs a little over $200 alongside a lump sum as an initial payment on outstanding tax liability. It's recommended you use a tax specialist as it can be a complex process. In the end, you either get to pay in lump sums over 5 months or spread it over a year( monthly basis). Note that your offer may be rejected, although, you may re-apply within 30 days of the rejected application.
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