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Can I compromise with the IRS?

I owe the IRS approximately $20,000 dating back to 1999, and most of that is due to interest and penalties. I was thinking about an offer in compromise, but I don't have much money. I have heard some stories that the IRS has taken pennies on the dollar to settle some cases. My questions are: 1) Do you have any knowledge about this kind of settlement? 2) Do you have to have all the money up front or will they take a certain amount and then take payments so that there is an end in sight? -Iris

Dear Iris,

In my opinion, it never hurts to ask. The IRS may agree to a compromise if it is made on one or both of the following grounds: (1) Doubt as to the liability of the amount owed, or (2) Doubt as to your ability to fully pay the amount owed.

If the IRS accepts your offer, you may be able to pay from a percentage of future earnings.

From what you’ve told me, you might fit the requirements. You can get the correct forms by calling 800.829.3676.

You should also consider seeking legal advice from an attorney given the potential consequences of your decision to make an offer in compromise.

Good Luck!

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