Offer In Compromise

Offer in Compromise - OIC
An offer in compromise (OIC) is the most preferred collection remedy to pursue, if you or your business qualify.  If IRS accepts your OIC, your tax liability is fully settled for less, often much less than your original tax liability.
If taxpayers are unable to pay a tax debt in full and an installment agreement is not an option, they may be able to take advantage of an offer in compromise (OIC). Generally, an OIC should be viewed as a last resort after taxpayers have explored all other available payment options. The IRS resolves less than one percent of all balance due accounts through the OIC program.
What is an Offer in Compromise?
An offer in compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax debt. The IRS has the authority to settle, or "compromise," federal tax liabilities by accepting less than full payment under certain circumstances. A tax debt can be legally compromised for one of the following reasons:
Doubt as to liability - The IRS may also accept an offer in compromise when doubt exists that the amount of tax owed is correct. The taxpayer needs to explain why they believe that they do not owe the tax that they would like to compromise. Financial inability to pay will not be considered under this basis alone.

Doubt as to collectability - Under this basis, there is doubt that the amount of tax owed can ever be paid back in full. In order to successfully negotiate this type of offer in compromise, the taxpayer must demonstrate through complete and thorough financial statements and supporting documentation that there are insufficient assets and income to pay the full amount of tax owed.

Effective Tax Administration - Under the third basis for an offer in compromise; there is no doubt the tax is correct and could be collected but an exceptional 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.
If the offer in compromise is accepted, payment can be made via one of three options:
Cash (within up to 90 days of acceptance);
Short-term deferred payment plan (payable within 24 months of acceptance);
A long-term deferred payment plan (payable over the remaining time left on the collections statute).
Once the offer in compromise is accepted, the taxpayer must remain in compliance with all filing and payment obligations, including staying current with quarterly estimated tax payments and not incurring any new tax debt, for five years or until the offer amount is paid, whichever is longer. Failure to abide by these terms may result in the
Should you qualify for this program, we will gather all the appropriate information on your behalf, including the determination of the actual debt. Then we will prepare and submit for the IRS to review. Should the Offer in Compromise be accepted, we may be able to help you save thousands of dollars in taxes and penalties. Give us a call today