Tax season can be overwhelming with everything that needs to get done like gathering documents, getting tax help, and filing properly. It’s particularly stressful if you don’t have the money to pay the IRS. If that’s the case for you, you can file an Offer in Compromise to help with payment. But, you may be wondering: will it affect my credit score? Here is what you need to know about what an Offer in Compromise is and whether or not it will affect your credit score.

What is an Offer in Compromise?

An Offer in Compromise is an agreement between the IRS and a taxpayer that allows the taxpayer to utilize additional tax relief options and reduce the amount owed. It’s used when the IRS determines that it will not be able to collect the full sum owed from a taxpayer. Taxpayers that file an Offer in Compromise are required to present documents to prove financial hardship.

Does an Offer in Compromise Affect My Credit Score?

Fortunately, filing an Offer in Compromise does not impact your credit score. In fact, credit agencies aren’t notified when an Offer in Compromise is filed, so they will have no way of knowing. The only way an Offer in Compromise could affect your credit score is if no resolution is found and you continue to owe the IRS or if you are ignoring their requests for payment. 

ZP Tax, Inc. has built a reputation for providing premier tax help to individuals and businesses located in Montgomery County, MD. From year-round bookkeeping to tax preparation and resolution services, their team of experts work hard to ensure you're getting the tax help you need, along with a dedicated professional to answer any questions. To learn more about their services, visit them online or call (301) 587-4829 to set up your first appointment today.