The big news out of Washington this week is that the Internal Revenue Service is clamping down on the deluge of taxpayer requests to reduce their delinquent tax bills by forcing them to pay for the privilege of receiving an offer in compromise.
Starting this November, the IRS will charge a $150 application fee for the processing of offers in compromise. The IRS expects that this fee will help offset the cost of providing this service, as well as reduce frivolous claims.
The IRS anticipates the fee also will reduce the number of offers that are filed inappropriately--for example, solely to delay collection--enabling the agency to redirect resources to the processing of acceptable offers.
All taxpayers who file an OIC will have to pay the application fee with their submission unless the offer is based solely on doubt as to liability, or the taxpayer’s total monthly income falls at or below income levels based on the Department of Health and Human Services poverty guidelines.
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