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April

Offer in Compromise

One of the most popular tax relief programs advertised today is the Offer in Compromise (OIC). The Offer of Compromise allows a taxpayer with a tax liability, and/or who is in danger of a lien or levy on accounts, to substantially reduce the debt for less than total amount owed. OIC programs, until recently, could be settled in four or five years. Now they can generally be done in about 24 months or less.

Recent actions by Congress were taken in order to close outstanding and costly tax debt investigations. Since May of 2012, the IRS has made efforts to dramatically liberalize its Offer in Compromise program.

Legislation removes some perceived obstruction placed by the IRS before the taxpayer, in general, by loosening the eligibility requirements, specifically by:

Restrictions to Offer in Compromise Eligibility

Not all taxpayers with outstanding debt are eligible. In order to qualify for the Offer in Compromise program, a taxpayer must have a tax professional or tax attorney submit a draft letter as well as a substantial offer on your behalf.

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If you’ve considered representing yourself, you might want to re-consider. An OIC is generally not accepted if the IRS believes the liability can be paid in full as a lump sum or a through a payment agreement. This is determined by your reasonable collection potential.

Taxpayers who choose to file an Offer in Compromise on their own behalf, may find themselves paying more in penalties and interest as a result. This is because the IRS only accepts a portion of the requests it receives; it is often the unprofessional submissions which are disqualified. What’s worse, the IRS may suspect that the taxpayer who has ignored previous notices is stalling rather than taking responsibility. If this is determined, the IRS will continue with their efforts to levy bank accounts and wages in order to collect on the debt.

IRS Tax Settlement Programs for non-qualifying

Other options for those not meeting OIC IRS settlement guidelines who still need IRS tax debt settlement help should consider other IRS tax settlement programs. Additional programs include IRS penalty abatement, which removes penalties from accrued liability, IRS partial payment plans, and requesting for collections to be placed on a permanent hold, or CNC status.

Getting a qualified offer in compromise approved is a timely and exhaustive process, and is one that requires professional handling. Stack the odds on our side and contact us today.