How to Settle IRS Debt
If you’re struggling with tax debt, you’re probably looking to learn how to settle IRS debt. This is a process known as an Offer in Compromise – Doubt as to Collectibility (OIC). While many taxpayers might think this requires “negotiating” or “playing tough” with the IRS, it’s actually all about the numbers. Here’s how to settle your IRS debt through an OIC.
Step 1: Determine if you are Current on your Tax Obligations
You must be currently be in full compliance, which means:
- You’ve filed all your tax returns that you are legally required to file
- You’re having the correct amount of taxes withheld based on your Form W-4 or paying your estimated tax payments for the current year if you’re self-employed
- Businesses must be making their current quarter’s payroll tax deposits
- Continue to remain compliant through the rest of the process