An Offer in Compromise is one of the most well-known IRS tax-resolution programs, but it is also one of the most misunderstood.

You may have seen advertisements promising to settle tax debt for a small fraction of what is owed. While the IRS does have the authority to accept less than the full balance in qualifying cases, not every taxpayer is eligible.

Prendamano Tax Resolution & State Tax Advisory helps taxpayers determine whether an Offer in Compromise is a realistic option before pursuing the process.

Based in Melville, we represent clients throughout Long Island, Nassau County, Suffolk County, Queens, Brooklyn, and New York City.

The IRS generally considers a taxpayer’s ability to pay, income, expenses, assets, and equity when reviewing an Offer in Compromise. The amount offered must usually reflect what the IRS believes it can reasonably collect based on the taxpayer’s financial situation.

That financial analysis is one of the most important parts of the process.

The IRS will not usually accept an offer simply because paying the full balance would be difficult or inconvenient. If the government believes the taxpayer has sufficient income or assets to pay more, another resolution option may be considered more appropriate.

Before an offer can be pursued, taxpayers generally need to be current with required tax filings and certain ongoing tax obligations. For business owners, additional compliance requirements may also apply.

At Prendamano Tax Resolution, we begin by evaluating the tax debt, income, expenses, property, available equity, filing history, and overall financial position.

If an Offer in Compromise appears appropriate, the goal is to prepare an accurate and well-supported submission that reflects the taxpayer’s true ability to pay. If an offer does not appear to be the strongest option, we can evaluate alternatives such as an installment agreement or another collection solution.

An Offer in Compromise should be based on financial reality, not marketing promises.

If you owe significant IRS tax debt and want to know whether settling for less may be possible, contact Prendamano Tax Resolution & State Tax Advisory in Melville to discuss your situation.