What should i do first, installment agreement or offer of compromise?

Question

Will the irs say no to offer of compromise if you own a house. does the irs take your primary residence and put you in the street, leave you with no car????

Answer 1

The IRS will generally only say "Yes" to an OIC if there's no reasonable chance that you'll ever be able to pay the debt unless there's a strong argument that you may not owe the debt at all.

The first step is always an installment agreement, assuming that you can't just pay it in full in one lump.

The IRS probably will put a lien on your home and any other property of any value but that is just to preserve their right of recovery should you attempt to sell out from under them. The IRS rarely, if ever, takes someone's home and puts them in the street. That would be a last resort and is almost never resorted to.

Answer 2

I respectfully disagree with my fellow Bostonian. I see no reason not to submit an offer in compromise, even a partial pay offer, and only then submit the installment offer if the offer in compromise is rejected, provided of course that you qualify for an offer in compromise. Check out the applicable IRS publication and try to figure out if you are financially eligible.
As for your house, they will consider any equity that you have in the house before accepting an offer in compromise. They may well ask for a down payment equal to whatever you can get out of your house on a re-fi.