Congratulations, you just got the letter from the IRS (Letter 5490) accepting your Offer-in-Compromise settling your tax debt for pennies on the dollar.
But guess what? It’s not over yet.
My firm, By The Book Taxes, located in Norwalk, CT specializes in income tax preparation for individuals, families and self-employed people. By the Book Taxes also helps clients resolve their tax debts by preparing and filing Installment Payment Agreements, Offers-in-Compromise, Currently Not Collectible and Innocent or Injured Spouse applications.
The first thing you must do is to fulfill the terms of the agreement, either by paying the Offer amount within five (5) months of acceptance for a lump sum agreement or within twenty-four (24) months for a short term deferred Offer.
Next, you must maintain tax compliance for the following five (5) years.
The IRS defines tax compliance as:
- Filing your tax returns on a timely basis
- Having sufficient taxes withheld from your W-2 income
- Making your quarterly estimated tax payments if you are self-employed
Failure to maintain tax compliance for the five (5) years after Offer acceptance will result in a default of your agreement, reinstatement of your forgiven tax debt and a restarting of the IRS collection process.
Please do everything you can to avoid this fate.
If you have years of unfiled tax returns or owe the back taxes, please call me. I can help.