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Many taxpayers are completely and
totally unable to pay their outstanding IRS tax debts. Congress
has made provisions to help these people. The IRS Offer in
Compromise (OIC) Program is designed to assist taxpayers from
being forced into an "undue economic hardship" by IRS'
collection attempts.
In many cases, a taxpayer
and IRS can negotiate an agreement to "compromise" the total
amount that is due down to a lesser figure. IRS requirements are
very exact and detailed and
must be met; the entire OIC process generally takes at least
six months and usually about a year from start to finish.
If you qualify for an Offer in
Compromise, you must file your Offer with IRS based on one of
the three following reasons:
- Doubt as to
Collectibility - If you think you cannot pay the
total amount you owe (including penalties and interest),
your Offer in Compromise should be filed for this
reason. This is the most common and most
popular reason for filing an OIC.
- Doubt as to Liability
- If you think you really don't owe the tax and that IRS
made a mistake by assessing the tax against you, your
Offer in Compromise should be filed for this reason. This
is a less popular reason for filing an OIC and is
usually unsuccessful. Many tax protestors
and other people who are dissatisfied with the income
tax system will attempt this OIC method, but usually do
not have an acceptable reason for "doubt as to
liability."
- Effective Tax
Administration (ETA) - If you think the amount due
is incorrect, and you also think there is little or no
chance that the amount you owe can be collected, there
may be some kind of a special reason that will allow IRS
to consider your Offer. IRS requires that you prove that
by collecting the tax you owe, that it would create an
economic hardship or would be unfair and inequitable.
A lot of people try this reason for filing an Offer,
but very few are successful.
You have probably seen TV
commercials promising "pennies on the dollar" settlements for
income tax debts, but each taxpayer's situation is unique and is
subject to stringent IRS rules, requirements, and calculations.
So please don't be mislead by telephone sales techniques
designed to convince you that you have an easy case that is then
followed by a request that you sign a contract and begin making
payments to the OIC firm. You should talk to an OIC professional who will spend
time with you on the phone and discuss your case in detail based
on your specific monthly income and expenses and not
just a general conversation with a salesman.
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Features and Benefits
Our Offer in Compromise Information
and Analysis System is
comprehensive and easy to navigate.
Although we have chosen not to provide OIC
preparation services, we do provide:
- Referrals to competent OIC
professionals nationwide
- Referrals to competent OIC
professionals locally
- Information and forms
- Our most popular feature is our
OIC
Analysis for taxpayers who prepare their own Offer but want
professional advice and assistance before or during their
own Offer period
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