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Posted on Nov 10, 2009 in Installment Agreement, Offer in Compromise | 0 comments

Can I File an Offer in Compromise after Setting up an Installment Agreement?

Setting up an Installment agreement can be a challenge, but it is also a great way to resolve some IRS cases.  Very simply put, an installment agreement is a way to pay off your tax debt with a monthly payment plan.  You may full pay your tax debt or you may not, depending on the amount you are paying each month and the time remaining for the IRS to collect against you.  However, the very best way is when you can successfully negotiate an offer in compromise to settle your case for much less than you owe.  People that I have worked with in the past have been wary of setting up an installment agreement (even when it was absolutely necessary to prevent or stop a levy from happening) because they did not want to foreclose the option of being able to file an offer in compromise to settle their IRS debt.

What I told them, and what I am sharing with you is that setting up an installment agreement does not prevent you from being able to submit an offer in compromise and resolve your case that way with the IRS.  In some circumstances, this may just help you because it will already let you konw what type of financial information the IRS requires when submitting an offer in compromise and you may even have some of the forms required for an offer in compromise completed with only a little updating required before you can submit your offer in compromise.

Bottom line: the installment agreement will not prevent you from filing an offer in compromise.