If you have tax debts that are out of control, you may decide to apply for an IRS Offer in Compromise. This is basically where you, the taxpayer, forms an agreement with the Internal Revenue Service in which your tax liabilities are settled for less than the full amount owed. The only way to qualify for this type of tax relief is to prove to the Internal Revenue Service that you cannot reasonably pay your debts in one lump sum or through a tax payment plan.

When you recognize that an IRS Offer in Compromise is your only way out, you will soon come to the realization that the process of qualifying for this agreement requires quite a bit of homework. There are many documents that must be collected, forms that must be filled out, deadlines that must be met and a certain professional manner in which you must go about it. First of all, you will need to file all those unfiled tax returns from the past. At this point, you should also double check the amount that you owe by obtaining a transcript from the IRS to be able to prove the total amount of your debt.

The IRS Offer in Compromise is all about paperwork. Forms 656 and 433A must be filled out and included, and you must be sure that you have any additional documents that are required to be included with these forms. You will be denied any sort of tax relief if you don't have every piece of paperwork attached with everything filled out correctly. Your documentation must also prove your income, deductions for the past three to six months, all assets such as cars, homes and other property, and the amount that you pay in monthly bills.

The final step to qualifying for an IRS Offer in Compromise is to print out copies of all these forms and send the completed package to the IRS. You should also make copies for your own personal records. If you have done everything correctly, you just might get the tax relief you need.