Will An Offer In Compromise Work For You?

If an offer in compromise is accepted by IRS, what is owed the government is satisfied by paying less than the full payment due. One of the following three circumstances must be met for an offer to be accepted:

1. Doubt as to Liability

Doubt exists that the assessed tax is correct.

2. Doubt as to Collectibility

Doubt exists that you could ever pay the full amount of tax owed.

3. Effective Tax Administration

There is no doubt the tax is correct, and no doubt that the amount owed 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.

Let The Taxpayer Beware!

You should be skeptical of promoters' claims that tax debts can be settled for "pennies on the dollar" by using this program. You absolutely must check the OIC requirements to see if an offer in compromise is right for you.

In addition, Taxpert strongly encourages you to carefully review the credentials of any professional that you hire to submit an OIC on your behalf. In particular, you should ask:

(a) how many OIC's the professional has prepared;

(b) how many submitted OIC's have been successful and to what degree;

(c) how long on average the OIC process takes;

(d) what the total charges to you will be and does the full amount have to be paid upfront;

(e) how frequently the professional will communicate with you about the status of the OIC submission.

The link that follows takes you to the part of the IRS website that explains the OIC process. Please go there now and read this excellent content completely.

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