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Richmond · Offer in Compromise

Offer in compromise representation in Richmond

Richmond taxpayers who owe the IRS more than they can pay may settle for less with an offer in compromise, mailed to the IRS in Memphis.

Talk to our team today Or call (804) 485-1492

Once a mailed offer reaches the IRS's centralized offer unit in Memphis, most of the process runs on forms and letters. You may never speak with the agent assigned to your case. One missing schedule or unsupported number can delay or defeat an otherwise sound offer.

There is no fixed percentage for how much to offer. Your offer generally must meet or exceed what the IRS could reasonably collect, based on your income, expenses, and assets. Our offer in compromise page explains who qualifies, the application fee, and the Low Income Certification.

If the IRS is already collecting

Has the IRS sent a final notice of intent to levy, or a notice that a lien was filed? Then you can raise your offer in a timely collection due process hearing. If Appeals turns the offer down, you can go to the Tax Court. That court can hear the case in Richmond, and Fourth Circuit precedent applies.

Unfiled returns, other balances, and payment plans

An offer rarely stands alone. Richmond-area taxpayers with unfiled returns usually must file them first, or the IRS will not consider an offer. The IRS needs all required returns and payments to be current. If you also owe the Virginia Department of Taxation, deal with that balance alongside the federal offer.

An offer is also not your only option. If you have steady income and could pay over time, an installment agreement may suit you better.

Why the paperwork matters

The IRS is generally willing to compromise with taxpayers who truly cannot pay in full, if they are honest, open, and complete about their finances. When an offer fails, the cause is rarely the IRS's unwillingness. It is a weak submission.

Our Richmond office prepares your offer and guides it from start to finish. Before filing, we check every document for the detail the IRS expects.

Common matters we handle

  • Settling assessed IRS balances that are more than a Richmond taxpayer can realistically pay
  • Raising an offer in a collection due process hearing, which keeps Tax Court and Fourth Circuit review open
  • Coordinating an offer with unfiled returns or a balance owed to the Virginia Department of Taxation
  • Responding when a first offer is rejected, or sent back with a request for more information
  • Preparing Form 656 and the financial statements that go with it, without gaps or errors

A note on admissions Federal tax matters are handled nationwide, including IRS examinations, appeals, collection, and Tax Court litigation. Virginia state and local tax matters are handled together with Whiteford attorneys admitted in Virginia, or with co-counsel where a matter requires it.

Why taxpayers choose Whiteford

  • Local to Richmond and experienced in federal offer in compromise resolution
  • Every form and figure reviewed before filing, because a process run by mail leaves no room to fix mistakes later
  • Straight answers on whether an offer in compromise is right for you, before you pay the application fee

Frequently Asked Questions

Where does an offer from a Richmond address go, and does collection stop in the meantime?
Virginia residents mail their offers to the IRS's centralized offer unit in Memphis. Until the IRS accepts yours for processing, it can keep collecting, though an earlier levy is usually released. Then it cannot levy for the offer's taxes while the offer is pending, for 30 days after a rejection, or during a timely appeal. Its time to collect is extended. It may still file a notice of federal tax lien. Penalties and interest keep growing. Missing a deadline for more information can get the offer returned without appeal rights.
Can a court review the IRS's decision on my offer?
Yes, if you raised it in a timely collection due process hearing after a final notice of intent to levy or a notice that a lien was filed. If offer staff recommend rejection, Appeals makes the final decision. You can petition the Tax Court within 30 days. The court can hear the case in Richmond. It follows Fourth Circuit precedent, since a Richmond resident would ordinarily appeal there. It asks whether Appeals' conclusions were reasonable, not beyond dispute. Withdrawing the hearing while the offer is pending gives up that review.
I could pay in full, but only by giving up what I live on. Is there an offer for that?
There can be. Suppose a Henrico retiree lives only on a pension. Their one asset, a retirement account, could cover the whole tax. Emptying it would leave too little for basic living expenses. Treasury regulations use a case like this to illustrate an offer to promote effective tax administration. The IRS may accept one even though it could collect in full. But collecting must cause economic hardship or, in exceptional circumstances, be unfair. A history of not filing or paying counts against you, and you must document the hardship.
The bill I got after my assessment looks wrong, not only too high to pay. Is an offer still the right tool?
Possibly, but a different kind. A doubt as to liability offer, on Form 656-L, is for a genuine dispute over whether you owe the tax or how much. It needs no application fee or financial statement. It does need a written explanation of why the tax is wrong, backed by evidence. A balance from an audit must go through audit reconsideration first. This offer is not available once a court has decided the liability. You must also resolve the dispute before filing any offer based on ability to pay.
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