IRS Offer in Compromise Services

The IRS Offer in Compromise (OIC) program was established by the U.S. Congress to help taxpayers who have experienced significant financial problems to get a fresh start, if they qualify. Back tax liabilities, penalties and interest can be settled. All federal tax liens can be released once the IRS accepts the OIC and the negotiated settlement amount is paid.

If you qualify for the Offer in Compromise program, you can save thousands of dollars in taxes, penalties and interest. Taxpayers can negotiate settlements on all types of taxes, including most payroll taxes, penalties, and interest. It is the closest thing to “amnesty” that the federal government offers in connection with back tax debt.

Taxpayer’s should bear in mind however, that the Offer in Compromise program is a privilege, not a right such as bankruptcy. That being said, it is a very subjective process where the IRS has the final word. The OIC process is a very complicated drawn out process that can take upwards of nine months to a year and even longer. There are guidelines, rules and protocols established by operation of law, under IRC Section 7122. However, most Offer Examiners (former Revenue Officers) use the Internal Revenue Manual (IRM) as their guide.

Please note that in 2007, nationally, 46,000 Offers were submitted with only 12,000 or about 26% were accepted. TRS’s acceptance rate, on the other hand, on offers we submit is nearly 5 times (approximately 90%) the national average. Why? We don’t allow clients to retain us to submit frivolous OICs. In other words, if we don’t feel the client is a viable candidate for the program, we won’t let the client retain us for an Offer in Compromise. We put our clients through a rigorous in-depth interview to find out if they really DO qualify for an Offer in Compromise. Most taxpayers do not. We probably turn down (or suggest other viable solutions) 4 out of 5 potential clients who want or think they can do an OIC. This is huge point of difference with our competition.

If the layman attempts to go through this process without proper expert representation, their Offer in Compromise will not only get rejected but they will end up owing the IRS more money (in additional accruing penalties and interest) than when they started the process.

The Offer in Compromise program provides taxpayers who owe the IRS more than they could ever afford to pay, the opportunity to pay a small amount as a full and final payment.

This is because the government would actually be saving money by accepting a lower amount now, from a taxpayer, rather than incurring additional internal administrative costs by trying to collect over a prolonged period of time when they know the taxpayer will never be able to pay them back in full before the statute of limitation expires (generally 10 years) on collection.

A Doubt as to Collectability (DATC) Offer in Compromise is negotiated on the basis of a taxpayer’s inability to pay and takes into account the taxpayer's current financial position including the taxpayer’s equity in assets.

The Offer in Compromise program also allows taxpayers that do not agree that they owe the tax or feel that the tax has been incorrectly calculated, an opportunity to file an Offer in Compromise- Doubt as to Liability (DATL) and have their tax liabilities reconsidered.

For more information about the IRS Offer in Compromise program, check out these resources:

• Overview of the OIC and the NEW NON-REFUNDABLE 20% Rules
• Offer in Compromise FAQ and IRS Guidelines
• Offer in Compromise Application Fee
• Offer in Compromise Processing
• Offer in Compromise Determination

Read our blog articles about an IRS Offer in Compromise:

• Top 5 Tax Negotiations Do’s and Don’ts for a Successful Offer in Compromise
• Client wins Offer in Compromise and is Now Debt Free
• IRS Question Corner: Offer in Compromise