IRS Settlements Might Become Less Costly

Congress is considering legislation that would eliminate the 20% downpayment requirement for IRS settlement offers:

To submit an Offer In Compromise (OIC) with the Internal Revenue Service in order to pay pennies on the dollar, a nonrefundable 20% downpayment is required. Combined with a very low acceptance rate by the Internal Revenue Service of OICs, the downpayment has the effect of discouraging people from applying for an Offer.
A Congressional bill was recently introduced the title to which tells it all: “Repeal of the Partial Payment Requirement on Submissions of Offers in Compromise”.

If enacted into law, the struggle with your tax debts may be a bit easier. If this bill passes, it’s good news for both taxpayers and the IRS. The more legitimate offers that are filed by taxpayers and accepted by the IRS, the narrower the tax gap becomes.