What is an Offer in Compromise?
An offer in compromise (OIC) is an alternative agreement between a taxpayer and the IRS to resolve a tax liability. The IRS has the authority to settle, or compromise, federal tax liabilities by accepting less than full payment under certain circumstances as follows: Doubt as to Liability: Doubt exists that the assessed tax is correct. Doubt as to Collectibility: Doubt exists that the taxpayer could ever pay the full amount of tax owed.
This is the most publicized and most misunderstood solution (even to the IRS officers). While its true that you can make an offer of pennies on the dollar, it doesnt mean that the IRS would accept it. Most likely, your offer will be refused if you or your representatives are not experienced in Offer In Compromise. In fact, their help can lend more harms and good. Some professionals live by submitting and re-submitting frivolous Offer In Compromise. This costs you time and money while making the IRS angry at you for wasting their time. We never submit an offer unless we know that it has a very good chance of approval and well keep resubmitting until its approved, at no cost to you. Virtually all of our offers were accepted, saving as much as $439,000 per client! Top 22.
An Offer in Compromise (“OIC”) is a way for taxpayers to compromise their outstanding tax obligations without having to pay the full liability owed. Do I qualify for an Offer in Compromise? The Internal Revenue Service may legally compromise a tax liability for one or both of the following reasons: Doubt as to Collectibility. This term means that there is some doubt as to whether the IRS can collect the tax bill from you either now or in the foreseeable future because of your financial situation. This is the ground most frequently used by taxpayers attempting an offer. Doubt as to Liability. This term means that there is some doubt as to whether you legally or factually owe the tax bill. How do you determine monthly income? The IRS uses a table of standard maximum housing, living, and transportation expenses that will be allowed. You take your monthly after-tax income minus your expenses, or the standard, whichever is less, and come up with your monthly disposable income. (Follow the l
An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service (IRS) that resolves the taxpayer’s tax liability. The IRS has the authority to settle, or compromise, federal tax liabilities by accepting less than full payment under certain circumstances. The IRS may legally compromise for one of the following reasons: Doubt as to Liability: Doubt exists that the assessed tax is correct. Doubt as to Collectibility: Doubt exists that the taxpayer could ever pay the full amount of tax owed. The minimum offer amount must generally be equal to (or greater than) the taxpayer’s reasonable collection potential (RCP). The RCP is defined as the total of the taxpayer’s realizable value in real and personal assets, plus his/her future income. Note: Unless the taxpayer files an OIC claiming special circumstances, the offered amount must equal or exceed the reasonable collection potential. Realizable value is the asset’s quick sale value (amount which could be reason
