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Offer In Compromise

Many consumers and small business owners may never have heard of the term ” offer in compromise ”. An offer in compromise or OIC as it is called by the IRS is an agreement between a taxpayer and the IRS that will resolve the taxpayer’s tax debt for a percentage of what was owed. Few people realize or are aware that the IRS has the authority to compromise and settle federal tax liabilities by excepting a compromised payment of the taxes owed under certain circumstances. In other words, they have the authority to reduce the amount of taxes owed by the taxpayer proved the taxpayer qualifies for the Offer in Compromise program. This situation occurs when a taxpayer is unable to pay the tax debt they owe IRS in full and they do not have the assets or income to meet their income tax obligation. The Offer in Compromise program is the most popular program to settle income tax problems and payroll tax problems provided the taxpayer or small business owner can meet IRS requirements for an Offer in Compromise.

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Offer in Compromise – Reasons for an OIC

There are three reasons why an offer in compromise may be considered. These include:

• Doubt as to liability

• Doubt as to collectibles

• Effective tax administration

The first area indicates that there is doubt that the assessed tax is actually owed by the taxpayer. The second area essentially means that the assessed taxes are considered correct, however, doubt exists that you could ever pay the full amount of the tax owed. In the third case, there is no doubt that the tax is correct and there is no doubt that the tax could be collected but there is an exceptional circumstance that allows the IRS to consider an OIC or offer in compromise. To be eligible for an offer in compromise the taxpayer must be able to show that full payment of the taxes would create an economic hardship, would be unfair, or inequitable.

Offer in Compromise — Frequency of Use

The offer in compromise is considered to be the best program for tax relief offered by the IRS. However, taxpayers and small businesses should be aware that promoters who claim to be able to settle tax debts for pennies on the dollar through the offer in compromise program should check the requirements for the offer in compromise to see if they will qualify. Checking the information given to you by an agent is a good plan. Make sure you can qualify for the Offer in Compromise program. Call us today and we can help you decide if you can qualify for tax relief through the Offer in Compromise program.

The best advice for taxpayers to retain reliable representation for your income tax problems and to help you petition for an Offer in Compromise. If you need help with unfiled tax returns or just need advice on how to handle an income tax problem call an expert, it will save you time and money. avoid an offer in compromise situation is to always pay your income taxes when they are due and in full. In all situations where you have difficulty in paying your taxes, further discussion with a tax relief expert is warranted and they can negotiate an installment agreement if you can’t qualify for the Offer in Compromise, which will lead to your full debt being paid to the IRS.

Contact us for a Free Consultation or call Toll-Free (855) 503-9073

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