Faced with overwhelming tax debt, more Americans than ever will be hoping to qualify for the IRS Offer in Compromise (OIC) program and save thousands of dollars in taxes, penalties and interest.

In 2007, approximately 46,000 offers were submitted to the IRS nationally and only 12,000 were accepted. This year, there will be more offers submitted this year, as well as a higher IRS acceptance rate due to the state of the economy.

While the OIC program can offer relief to Americans who have exhausted all financial resources available to them to pay their taxes, it also allows the government to collect a negotiated payment from distressed taxpayers now, which helps the IRS save on the administrative costs of going after people who simply don’t have the money to pay their tax debt.

So the government can collect a negotiated payment from distressed taxpayers now and instead of wasting time and resources trying to draw blood from a rock.

To qualify for an OIC, taxpayers must prove to the IRS that they have exhausted all financial resources available to them to pay their taxes. For example, homeowners are typically declined for OIC settlements. But without home equity to fall back on, many distressed homeowners may now be able to negotiate a reduction of their tax debt.

However, taxpayers need to remember that that the OIC program is a privilege, not a right, like bankruptcy. And taxpayers should beware of tax resolution companies that guarantee specific results. Our  acceptance rate on offers we submit is nearly 5 times (approximately 90%) the national average. Why? Because we don’t allow clients to retain us to submit frivolous OICs.

Companies need to be upfront and let clients know that not everyone can qualify for this type of help because the IRS has very strict guidelines governing eligibility. And taxpayers need to do their research and know what to look for when hiring an ethical and professional tax resolution company.

When the economy was strong, the IRS tightened the rules on the OIC program, but now things have changed and there are lots of people that deserve to take advantage of the program.

If you are in trouble with the IRS, our specialized staff of attorneys, CPAs, EAs and tax professionals can help. Visit the Tax Resolution Services web site  for a free tax relief consultation or call us at 866-477-7762.

More Tax Help, IRS News and Tax Relief Tips:

1. We’ve Expanded to Help More Taxpayers Resolve Their IRS Tax Problems!
2. IRS Announces Unprecedented Opportunity for Recession-Burdened Americans to Settle Outstanding Tax Debts
3. KLOS Tax Tip #44: Individuals Get a Tax Break - But Get Tax Help if You Owe Back Taxes!
4. Tele-Seminar Featuring Insider Secrets of Tax Relief for Small Business Owners on February 18, 2009
5. IRS Offer in Compromise Helps Taxpayer in Monroe, WA Save More Than $200,000

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This entry was posted on Sunday, January 25th, 2009 at 1:33 pm and is filed under Offers in Compromise, Tax news and tips, Working with the IRS. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.