Offers in Compromise versus Filing A Chapter 13 Bankruptcy

William F. Kunofsky

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Tax Lawyer

Contributor Level 9

Posted almost 3 years ago. 0 helpful votes



Why bankruptcy may be better than an offer in compromise.

More than 85% of the offers in compromise filed are rejected by the IRS. The offer must be advantageous to the IRS for them to accept. A Chapter 13 bankruptcy has a higher rate of success than offers in compromise. Professional fees for Offers are expensive. Frequently the IRS will determine all of the debt must be paid. Even if all of the debt must be paid in Chapter 13 the repayment period is longer. Monthly payments are often lower.


Frequently Offers Should Not Be Filed

There is no secret about having an offer accepted. It usually requires more money than the taxpayer is able to pay. Offers should be carefully analyzed and compared to bankruptcy options. Most tax representatives know very little about bankruptcy.


Chapter 13 May Allow Smaller More Affordable Payments

Results get better in bankruptcy when taxes are older and there is little property. Some tax debt may not have to be repaid and the repayment period is longer. Typically, sixty months versus twenty four months for an offer. Filing Chapter 13 may stop levies, garnishments, and other enforcement by the IRS.


Local Representation Is Otten Better than Nationwide Firms.

Many large nationwide firms utilize sales people and do not handle your case locally. However, the IRS is local. You need personal attention not bureaucracy. The person you hire to represent you should know all of the remedies available to help you choose your best option. You are the client.

Additional Resources

You can see articles about the different types of options for tax debt at my website also see The U.S. Courts have an excellent article on bankruptcy. See

Choices When The IRS Calls

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