1. Doubt as to Collectibility

This exists when the taxpayer’s verified asset equity and expected future income are legally insufficient to pay the full tax balance prior to the expiration of the statutory collection period.

2. Doubt as to Liability

This exists when there is a legitimate factual or legal dispute regarding whether the tax debt assessed by the IRS is correct under the Internal Revenue Code.

3. Effective Tax Administration

This applies when the tax assessment is fully accurate and collectible, but requiring full payment would create severe economic hardship or be unfair due to exceptional circumstances.

Disposable Monthly Income

Your monthly earnings minus allowable national and local standard living expenses (housing, transportation, food, and healthcare).

Realizable Asset Equity

The net equity in liquid and physical assets—such as bank accounts, real estate, vehicles, and business equipment—discounted for quick sale value.

Future Earning Potential

A formulaic multiplier projecting your anticipated future earnings over a 12 to 24 month evaluation window.

Filing Compliance

All required federal tax returns must be filed, estimated tax payments made, and you cannot be in an open bankruptcy proceeding.

Lump Sum Cash Offer

Requires a 20% non-refundable initial payment submitted with your application. Once approved in writing by the IRS, the remaining 80% balance is paid in five or fewer consecutive monthly payments.

Periodic Payment Offer

Requires your first monthly installment payment with the application, continuing regular monthly payments while under review. Once approved, the remaining balance is paid over 6 to 24 months.

1. Flawed Financial Disclosures: Over-reporting personal expenses beyond IRS allowable standards or under-reporting asset values leads to automatic calculation discrepancies.

2. Missing Tax Returns: The IRS will immediately return applications unreviewed if any required prior-year tax returns have not been fully filed and processed.

3. Failure to Respond to Requests: During examination, IRS examiners issue strict 30-day deadlines for additional documentation. Failure to reply promptly results in case closure.