IRS Offer in Compromise: Let’s Settle for Less
"Ever wondered if there's a way to reduce your tax debt? The answer is “IRS Offer in Compromise”, a golden ticket for many taxpayers. But, are you eligible for it? Join the list of 800+ taxpayers who have settled their dues through OIC with my help. Dive in, explore the possibilities, and let's settle your tax worries for less!
Understanding IRS Offer in Compromise: Know the Basics
The IRS Offer in Compromise (OIC) program allows eligible taxpayers to settle their tax debts for less than the full amount they owe. This program is actually beneficial for those facing financial hardships and cannot pay their tax liabilities either in a lump sum or through a payment agreement.
The primary goal of an OIC is to reach a mutually agreeable resolution between the taxpayer and the IRS. This ensures the government collects what can reasonably be paid while providing taxpayers a fresh start. Individuals and businesses with significant tax debts must understand the OIC program, which can offer a viable path to resolving their financial obligations to the IRS.
Subscribe To Get Free Tax Tips!
Please fill the form below, we never spam your inbox!
A Guide: Know the Benefits of an Offer in Compromise (OIC)
The Internal Revenue Service (IRS) audits financial data submitted by taxpayers to ensure its accuracy. However, being selected for an audit doesn’t necessarily imply a problem. There are several reasons why you might be chosen:
IRS Debt Reduction
One of the most appealing aspects of the Offer in Compromise IRS program is its potential to reduce the overall tax debt significantly. Depending on individual circumstances, taxpayers might settle for a fraction of what they owe.
Get Financial Relief
For many, the weight of tax debt can be overwhelming. Individuals and businesses can alleviate some of this financial burden by taking advantage of IRS Offers in Compromise. This makes it easier to manage other fiscal responsibilities.
Avoiding Additional Penalties and Fines
By settling through an OIC program, taxpayers can prevent further penalties and interest on their outstanding debts. This can result in considerable savings over time.
Fresh Start
Successfully navigating the Offer in Compromise process allows taxpayers to clear their slate with the IRS. This fresh start can provide peace of mind and an opportunity to rebuild one's financial standing.
Avoiding Lengthy Payment Plans
While the IRS does offer extended payment plans, they can span several years. An offer in compromise, on the other hand, provides a quicker resolution, freeing taxpayers from prolonged financial commitments to the IRS.
Eligibility Criteria for OIC: Do you Qualify?
Before applying, understanding if you qualify for the Offers in compromise IRS program is crucial. The IRS doesn’t grant this option to everyone. They have specific criteria that taxpayers must meet. Here’s a breakdown of the eligibility requirements:
Get IRS Offer in Compromise Help, whenever needed. It’s beneficial to seek professional guidance when determining eligibility. Experts familiar with the IRS Offer in Compromise help taxpayers assess their situation and guide them in gathering the necessary documentation.
Open Bankruptcy Proceedings
Taxpayers in active bankruptcy proceedings aren't eligible for the OIC program. Resolving the bankruptcy case first or considering other tax relief options is essential, in this case.
Genuine Disputes
If there's a genuine dispute regarding the tax amount owed or the tax debt is legally due, the IRS might consider an OIC application. However, this is assessed on a case-by-case basis.
Keep Documents Handy
You get a bonus by regularly checking your passport's expiration date and ensuring it reflects your current name and address to avoid complexities.
Making Required Payments
If you're a business owner with employees, you must have made all required federal tax deposits for the current quarter. For individuals, if you're in an active Installment Agreement, ensure that the necessary payments are made before seeking an offer in compromise to the IRS.
Ability to Pay
The IRS evaluates the taxpayer's ability to pay when considering OIC applications. This means assessing your income, expenses, asset equity, and future earning potential. If the IRS determines that you can pay the debt as a lump sum or through installment agreements, they might reject the OIC application.
Our Process: How I Help You Get an Offer in Compromise?
Initial Consultation
The first step is understanding your unique situation. I sit down with you to discuss your tax debts, financial circumstances, and previous interactions with the IRS. This comprehensive view helps in evaluating if an OIC is a viable option for you.
Financial Analysis
Before submitting an OIC application, I need to understand your financial standing. I'll assist in gathering all necessary financial information, ensuring it paints an accurate picture for the IRS.
Determining the Offer Amount
Based on your financial data, I'll calculate a feasible offer amount. This is crucial, as offering an amount too low might lead to rejection, while overestimating could mean you pay more than necessary.
Form Preparation and Submission
Once we're ready, I assist in filling out Form 656, Offer in Compromise, and any other necessary documentation. After a thorough review, I'll submit the package to the IRS on your behalf.
Negotiation with the IRS
Should the IRS have questions or concerns about the offer, I'll represent you in any negotiations, ensuring your best interests are always at the forefront.
Post-Acceptance Steps
If the IRS accepts the OIC, there are further steps to ensure compliance. I'll guide you through these, ensuring you meet all the terms and conditions of the agreement.
“Understanding tax debt can be challenging. That’s why I’m here to guide you through the Offer in Compromise process, step by step. My goal is to help you find a fair and manageable solution, allowing you to confidently move forward.”
Kenya Sheard
Founder & EA, Tax Resolution Experts
A Step-by-Step Guide: Understanding an OIC Application Process
Submission
Begin by completing and submitting Form 656, Offer in Compromise, along with the required documentation. This form details your financial situation, helping the IRS determine if a compromise is feasible. Need help? I can assist you throughout the process.
Payment
Depending on the type of offer chosen, you might need to submit an initial payment. This can be a lump sum or periodic payments, as outlined in Form 656.
Review
Once the IRS receives your application, they'll review your offer based on your assets, income, expenses, and overall ability to pay.
Response
The IRS can accept, reject, or return the application. If accepted, you'll need to adhere to the terms of the agreement. If rejected, you have the option to appeal.
Learn from Top Tax Advisor: IRS Fresh Start Program
Many wonder, “How does the IRS Fresh Start Program work?” or “How does Fresh Start Initiative work?” The IRS Fresh Start Initiative program is designed to make it easier for taxpayers to pay back taxes and avoid tax liens. Under this program, more people qualify for OIC, and certain existing liens may be withdrawn.
Offer in Compromise: Understanding the Potential Drawbacks
- Public Record: If the IRS accepts your offer, the agreement becomes a public record. This means that others can access the details of your settlement.
- Financial Exposure: During the application process, you'll provide detailed financial information to the IRS, giving them a comprehensive view of your financial situation.
- Default Risks: If you don't meet the terms of the OIC agreement, the IRS can revoke the settlement and reinstate the original amount owed, including penalties and interest.
- Limited Eligibility: Not everyone is eligible, and many offers are rejected. It's essential to understand how the IRS Fresh Start Initiative program and the general OIC process work before proceeding.
Frequently Asked Questions
To apply for an OIC, submit Form 656, Offer in Compromise. You must also submit Form 433-A (OIC) for individuals or Form 433-B (OIC) for businesses. A non-refundable application fee and initial payment are required when submitting the offer.
The duration can vary based on your case’s complexity and the IRS’s workload. On average, it can take anywhere from 6 months to 24 months for the IRS to make a decision.
If the IRS rejects your OIC, you will receive a written notification detailing the reason for rejection. You will have 60 days from the date of the rejection to request an appeal by filing Form 13711, Request for Appeal of Offer in Compromise.
Yes, an OIC has two payment options: lump-sum cash offer and periodic payment offer. The lump-sum offer requires an initial payment and the remainder in 5 or fewer payments within 5 months of acceptance. The periodic payment offer requires an initial payment and the remainder in monthly installments over 6 to 24 months.
There is no guarantee that the IRS will accept your OIC. Acceptance is based on a thorough review of your financial situation and other factors. That is why you need an Tax Resolution Expert to increase the chances of your offer being accepted.
While the OIC does not directly impact your credit score, the IRS will release any tax liens once your offer is accepted and you have met the payment terms. This lien release can have a positive effect on your credit.
One downside is that the legal assessment and collection period is extended while your OIC is being evaluated. Additionally, if the IRS accepts your OIC and you do not meet the payment terms, the IRS can reinstate the full amount of your tax debt.
Testimonials
Hear from my satisfied clients!
Jason Martinez
“When I first received the notice of an IRS audit, the anxiety was overwhelming. I had heard so many horror stories and didn’t know where to turn. That’s when I heard about Tax Resolution Experts. Kenya took the time to understand my situation, prepped me for the process, and stood right by my side during every interaction with the IRS. Today, I look back and realize I couldn’t have navigated through it without the right expertise. A sincere thank you to her for lifting such a weight off my shoulders!”
Rebecca Simmons
“Dealing with back taxes felt like a looming storm cloud over my life. Every year, I’d tell myself I’d address it, and the debt grew every year. That’s when I found out about Kenya! Her approach was compassionate, straightforward, and efficient. She laid out a clear plan; before I knew it, I was on the path to clearing my tax debt. She is nothing short of blessing, and I’m genuinely grateful for the guidance.”
Michael O'Brien
“Running a small business is challenging, and I admit payroll taxes got the best of me. Errors led to penalties, and soon it became a messy web I couldn’t untangle. Tax Resolution Experts were the lifeline I needed. It was Kenya’s name all over after that! She helped me clear up past mistakes and set up a system to ensure smooth payroll operations. I can’t express how much easier my life is now, all thanks to her diligence.”
Are you in debt?
Let’s find a solution together. Reach out to The Tax Resolution Experts and take the first step towards financial clarity.
Lets Connect
Contact Us
Get customized solutions every time. Expert advice just one consultation away.
