An Offers in Compromise (OIC) is an agreement between a taxpayer and the IRS that resolves the taxpayer’s debt for an amount less than they owe. If you owe the IRS or State more than you will ever be able to pay, there is good news. Under certain circumstances, the IRS and most States have the authority to settle or “compromise” tax liabilities.
It is important to note that a large number of submitted offers in compromise get rejected (in some years rejected offers outnumber accepted offers). Of the offers that get rejected, the majority are prepared by the taxpayer themselves. However, in addition to taxpayer submitted offers, way too many offers that are prepared and submitted by professionals also get rejected. We assume this is the case because many do not have a clear understanding on what basis offers are accepted.
This is why it is important to hire the right professional when submitting an offer in compromise. The Tax Resolution Institute carefully examines the data of each client to determine the likelihood that submitting an offer in compromise is indeed the right choice.
Types of Offers in Compromise
An IRS tax debt may be legally compromised under any of the following conditions:
Doubt as to Collectability – Doubt exists that the taxpayer would ever be able to pay the full amount of tax owed.
Doubt as to Liability – Doubt exists that the assessed tax is correct.
While the majority of Offers in Compromise offers are rejected by the IRS our experience in both diagnosing appropriate cases and correctly applying for an OIC gives us a winning advantage. Call (818) 704-1443 today.
Effective Tax Administration – There is no doubt the assessed tax is correct, and there is no doubt that the full amount owed could be collected, but an extraordinary circumstance exists that allows the IRS to consider a taxpayer’s OIC. To be eligible for a compromise on this basis, the taxpayer must demonstrate that collection of the tax would create an economic hardship or would be unfair and inequitable.
Taxpayers should be aware that many relief companies make false claims that their tax debt may be settled for “pennies on the dollar” through the Offer in Compromise Program. While it is true that debts may be reduced in some instances, it is imperative to ensure that the Offer in Compromise requirements will be satisfied prior to submitting an offer in compromise.
We can help
If you believe you qualify for an offer in compromise, contact us to discuss the details. If for any reason you will not qualify, that does not mean that we cannot address your tax issues in another way.
In certain cases, the IRS allows companies to submit an offer in compromise while remaining in business. In order to qualify for this type of offer, the business needs to show that they will be unable to pay their liability due to an outlying circumstance such as the death of a partner or a natural disaster. Reasons such as these indicate that the business will not be restricted from paying their taxes going forward. Explaining to the IRS that the company experienced a “slow” period will not suffice as reason to request a compromise.
We can help
If you believe your business qualifies for an in-business offer in compromise, contact us to discuss the details. If for any reason your business will not qualify, that does not mean that we cannot address your tax issues in another way including an individual offer in compromise.
IRS Offer in Compromise: find out if you qualify before submitting your offer! In their never ending quest to be the ultimate wet-blanket, the IRS has toughened the requirements needed to qualify for [...]
Peter Y. Stephan, Director of the Tax Resolution Institute speaks on IRS Installment Agreements: I'm here today to talk to you about IRS Installment Agreements. In order to solve your IRS tax collection issue, [...]
Are you aware that there are significant consequences for business and individual that do not file income tax returns? The April deadline is right around the corner. Although you may extend the time to file [...]
Unlike the vasty majority of tax resolution companies when it comes to your IRS Offer in Compromise, the Tax Resolution Institute offers a money back guarantee if we submit an Offer in Compromise to the [...]
On July 17, 2015, Tax Resolution Institute founder Peter Stephan is offering a Tax Resolution Essentials 200A seminar and live webcast for tax professionals, certified public accountants, enrolled agents and attorneys. In addition to teaching [...]
Easier IRS Offer In Compromise Program Help Although the IRS offer in compromise program has been around for decades, it has not functioned as it was originally designed. The original design was to [...]