Offer in Compromise (OIC)
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What is an IRS Offer In Compromise?
An Offer In Compromise is agreement between the taxpayer and IRS to pay less than the full amount owed.
An offer in compromise (OIC) is a program offered by the IRS to help financially troubled taxpayers get back into compliance with tax authorities. If an OIC is approved, it will allow you or a business to settle taxes owed for less. The IRS and States do not easily accept OICs, as only a fraction of taxpayers that apply actually have their offers accepted. In fact, in 2013, about 41.8% of OICs were accepted by the IRS. In order to apply for an offer in compromise, a full financial disclosure of assets, liabilities, income, and expenses with the IRS or State needs to happen. The preparation and documentation on this type of tax settlement is laborious. Furthermore, it can take up to 6 months for the taxing authorities to respond. Fortunately, the taxing authorities generally will stop collection actions on the taxpayer once the request is made as long as they don’t believe the request was made as a stalling technique.
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How Does The Offer In Compromise Service Work?
Our tax professionals may recommend you pursue an Offer in Compromise after they analyze your financial situation and tax transcripts. Beware of other firms making promises that they can settle using this form of settlement before knowing all the details about your finances and tax situation. We will never suggest this type of filing until we have analyzed your financial situation in great detail and matched it up with IRS standards to determine the likelihood your OIC being accepted. To determine your qualification for this program, our tax team will work closely with you to gather detailed financial data to match up to IRS guidelines (or state taxation authorities if they offer this type of settlement) to determine the likelihood of qualifying for an Offer In Compromise. If we determine that you are likely able to qualify we can determine what offer amount would most likely be accepted by the IRS and determine if you can afford that payment. Once we cross reference all the data, we will file all the appropriate paperwork and make the request (which will stop the collection process) and then we wait for the response from the IRS or State which can be several months.
Why Select Clean Slate Tax For Help On Your Offer In Compromise?
- Our team of tax professionals will never make false promises about your qualification for an Offer In Compromise.
- Our tax professionals are very knowledgeable about the process of the OIC and use various computer models to help determine qualifications and offer amounts to increase your success.
- If we find out you do not qualify for this program, we will help find the next best thing that fits your financial needs.
An Offer in Compromise (OIC): What To Expect
The ultimate goal is a compromise that suits the IRS and you. An offer in compromise has to be filed by you. You will need to prove to the IRS that you have payments made by your employer by data, so the forgiveness can be considered. By filling an offer in compromise, you will pay the balance in monthly installments, of course, while the IRS considers your case. Some payments will be excluded from this, so it helps to look into what to expect after the IRS receives your offer from the state.
Either way, you will have to make payments while your offer is being considered before an offer in compromise is made. It is likely that your case will be resubmitted so the assets before the case can be taken into account. This means following some rules as the collections may continue until the compromise is made.
Assets Before The Compromise
Assets should be listed before the OIC as the IRS may need to evaluate whether the Offer In Compromise is the best option. You may need to write-off assets received by yourself to pay the debt that is then collected by the IRS. This needs to be completed before the deadline. By providing the right data, an tax debt can be reduced to a little over 40% of the original debt. By having your debt settled through an offer in compromise, you can then still make payments while the IRS is considering the offer.
How Can Clean Slate Tax Help With Your Offer In Compromise?
The only way to get your OIC approved by the IRS is to apply using the official IRS Offer in Compromise form. At Clean Slate Tax, we’ve helped countless individuals and businesses successfully gain acceptance into the IRS Offer In Compromise program. Our tax attorneys, licensed CPAs, and tax experts are fully familiar with all current and evolving OIC administrative procedures and tax laws. We have years of experience with helping our clients solve problems with the IRS! Reach out today to discuss how our OIC tax services and debt solutions can help you.