The IRS returns any request for a transaction offer when a taxpayer hasn't filed all the required tax returns or hasn't made the required estimated payments. In addition, taxpayers who are currently in open bankruptcy proceedings are not eligible. A transaction offer is a request by a taxpayer for the Michigan Department of the Treasury to commit an assessed tax liability for less than the full amount. A transaction offer is called a package because the actual offer contains several required documents.
The address to which you send your transaction offer will depend on the state or area in which you live. The IRS website contains guides on how to deal with your commitment offer, which provide details of all the forms you'll need to complete, as well as the application fee you'll need to pay when you make your commitment offer. Taxpayers can offer a one-time cash payment (20 percent of the total amount offered), but most choose to make regular payments. In any case, it's still important that you continue to make all necessary payments associated with your offer until you know otherwise that the offer has been declined.
Whether the IRS is willing to accept your transaction offer and the exact amount of debt forgiveness is decided on a case-by-case basis. A commitment offer (OIC) is an opportunity to settle your tax debt for less than the full amount you owe. The agency generally approves a transaction offer when the amount offered represents the maximum the IRS can expect to collect within a “reasonable period of time.” The Guidelines generally describe the State of Michigan's commitment offering program, which includes when a taxpayer may be eligible to participate in the program, the process by which the Treasury will evaluate a taxpayer's offer, and what a taxpayer can expect with respect to any acceptance or rejection by part of the Treasury of the taxpayer's offer. It's important to read the guide carefully (or contact a tax professional), as it will explain in detail what the process entails, what you should do, the next course of action, and the IRS office you should deal with regarding your compromise offer.
This includes making sure you know where you should mail the commitment offer form and other necessary documents. IRS Form 433-A, Statement of Collection Information for Employees and Self-Employed Individuals, is the primary commitment offer form you must submit (although not the only type of documentation). Forms and instructions used to file a commitment offer from the Michigan Department of the Treasury and forms and instructions for requesting an independent administrative review. A tax professional can help you explain the process of a commitment offer, evaluate your eligibility, and help you prepare an offer.
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