If you’re doing your tax preparations and realize you aren’t financially capable of paying your tax debts in full, you may be able to file an offer in compromise. These allow you to pay less money to the IRS than the full amount you owe. They can take as little as a few months to as long as two years to process. Here’s a quick guide for what to expect in regards to timing.

Typical Cases

When deciding whether to approve your offer in compromise, the IRS considers your ability to pay based on your income, assets, and expenses. If your financial situation is relatively straightforward and you’ve completed the necessary forms, you should receive a decision quickly, usually in four to nine months. However, the more complex your situation, the longer it will take to process. In some cases, it could take up to two years.

After Two Years

If your offer in compromise is not accepted or rejected within two years, the IRS will automatically accept it. This is helpful for taxpayers with complex cases, as it guarantees an end date to the waiting process. However, these cases are rare. It’s far more likely that you’ll receive an answer as the deadline approaches.

Once You Receive Your Answer

If your offer in compromise is accepted, you will have to meet the terms listed in your application and complete all of your tax preparation forms in the interim. Any tax returns you would normally receive will be applied to the debt, and your tax lien will not be removed until you have paid the full amount stated in the offer. If your offer is rejected, you have 30 days to file an appeal. Visit a tax preparation expert to help get your appeal accepted.

If you need help filing an offer in compromise, contact ZP Tax in Montgomery County, MD. With years of experience, cutting-edge software, and up-to-date knowledge of accounting and tax preparation laws, they are here to help you save time and money on your taxes. To get started, call (301) 587-4829 or reach out online.