Professional Services

Offer in Compromise

What Is An Offer In Compromise

An offer in compromise ("OIC") is an agreement between the taxpayer and the IRS (or state tax agency if the liability is state tax) that settles the tax liability (income or payroll tax liability) for payment of less than the full amount owed. The IRS will generally accept an OIC when it is unlikely that the tax liability can be collected in full and the amount offered equals at least the amount the IRS calculates that it can collect from the taxpayer.

While the offer is under consideration, the IRS is prohibited from instituting any levies on your wages, bank account, or any other asset. If an offer is accepted, it can be paid off in monthly installments and interest does not accrue on the balance as it does under an installment payment agreement.

Keys to a Successful Offer In Compromise

  • Demonstrating to the IRS that you cannot fully pay the tax liability because your equity in assets and your income after "allowable" expenses are less than the liability.
  • Completing the financial disclosure forms correctly, thoroughly, and with knowledge of what is required to report as income and deduct as expenses, and providing the appropriate documentation.
  • Getting into full compliance with all filing requirements and tax withholding. For example, past due returns must be filed and tax withholding or estimated taxes (for the self-employed) must currently be in compliance.

Why Professional Representation is Useful

There is ample opportunity for vigorous and creative advocacy in presenting financial information to the IRS. The IRS's policies allow certain kind of expenses in computing a taxpayer's ability to pay, and thus whether an offer is acceptable, but only if the taxpayer fully and timely documents the need for the expenses. Knowing the rules and extent of IRS flexibility on these issues is crucial to obtaining the best possible result. We will work with you to present your financial information in the best possible light, and to thus increase the chances of successfully reducing your tax debt. The professional becomes the point of contact so you never have to speak to or negotiate with the IRS.

Services We Offer To Individuals, Self -Employed and Business Clients

  • Analyze carefully client's situation to ensure that an offer is the best solution for client.
  • Prepare all the required forms and ensure that all proper documentation is submitted.
  • Help client achieve compliance by preparing unfiled tax returns and ensuring that the correct amount of taxes are prospectively withheld or paid as estimated taxes.
  • Negotiate with the IRS to achieve the best possible outcome.
  • Prevent any collections action on the part of the IRS while we pursue the agreement (no levy or other collection action).
  • Appeal any adverse decision

Our Guarantee To Clients

The IRS only accepts a fraction of offers submitted. Our success rate is much higher than the overall acceptance rate as we encourage our clients to apply only if they have reasonable prospects of success. However, if your offer is not accepted, we will reduce our fee to the lesser amount we charge for an installment payment agreement. Since the documentation provided under an offer in compromise includes the documentation necessary for an installment payment agreement, a taxpayer whose offer is rejected can then apply for an installment agreement to settle the tax debt based on the documentation already provided.

Beware: Scam Companies

Some representation companies specialize in submitting quick and dirty offers that have little chance of success. These offers are typically poorly prepared and lack the required documentation. Some of these folks are merely incompetent and others are crooks plain and simple. The IRS is aggressively clamping down on these offer mills.

DO NOTWORK WITH ANY FIRM OR COMPANY IF YOU CANNOT PERSONALLY SPEAK WITH AN ATTORNEY.

While we are not accusing any company of any wrongdoing you should be aware of complaints against companies such as:

The process of submitting an OIC and obtaining acceptance of the offer is complicated. Success in the OIC area requires significant skill and full compliance with the IRS regulations, procedures and guidelines. The experience, skill, and judgment of your representative can make a difference between approval and rejection of your offer.

Call us now to begin preparing an offer to have your tax reduced.

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