Offer in Compromise

Our Tax Attorneys have good experience in planning, preparing and handling Offers in Compromise (“OIC”). An Offer in Compromise is commonly the best way for resolving your delinquent tax liability if you qualify for it. According to the last published IRS statistics, it was reported that the mean discount on accepted Offers was 89% (only 11 cents on the dollar was paid by OICs accepted Americans). The mean acceptance rate was 47.6 %. There are savings possibilities on accepted OICs and our expert team of Tax Attorneys and Tax specialists work very hard to satisfy our clients and to check whether our clients qualify for an OIC. To check whether you qualify or not call us today.

OIC was created in 1992 by Section 7122 of the Tax Code. So it is still relatively new IRS instrument. The two firm conditions under which an OIC can be successfully negotiated with the IRS include:

1. Doubt related to collectibility i.e. full taxes cannot be paid by the taxpayer
2. Doubt related to liability i.e. the taxpayer struggles that they owe the debt

Recently there is a third ground for acceptance which is “efficient tax administration” for example the IRS wants to earn as much as they can and they may think that 11 cents on dollar is more than good. In order to get an Offer in Compromise accepted, the taxpayer has to prove that they neither they have any ways of paying the tax nor they do not actually owe the tax.

The Primary factor of “doubt related to collectibility” is determined by a taxpayer’s personal financial profile which includes income, expenses, and property. Strict guidelines are set by the IRS for income, allowable expenses (which includes categories such as living, housing, and transport) and available equity in owned assets. One more benefit of submitting an OIC is that IRS Restructuring Act does not allow the IRS to collect a tax liability by levy during the time period in which the offer is being processed, or during OIC appeal or within 30 days after rejection of an offer. Our clients use this window of non collection to prevent IRS from collecting and hence they make up more time for themselves to pay. It also prevents IRS from taking control over any property in the interim.

If the OIC is accepted, Offer in Compromise can be paid off in the following two methods:

1. Cash most commonly 20 % with offer submission and 80% within 90 days of acceptance.
2. Deferred short-term payment in the forum of 24 monthly payments starting with submission of offer.

For more information on whether an Offer in Compromise is right for you, or whether you qualify, contact a tax lawyer today and see if we can help you with IRS Tax Relief.