An Offer in Compromise is a procedure permitted by the Internal Revenue Service to compromise a taxpayer’s outstanding and assessed tax debt. There are specific rules the IRS follows when it evaluates an Offer in Compromise. The key is that the offer must be structured so that it fits within your ability and meets the IRS’s rules. A properly structured offer can result in the savings of thousands of tax dollars.
The Internal Revenue Service approves only a minority of OIC applications each year. In 2004, the IRS approved about 16% of the total number of offers received. The reason for the high rejection rate is that many people submit offers without the assistance of experienced tax counsel. Our key to a successful Offer in Compromise is making sure that the complex parameters set by IRS are met so the IRS can process your application, and that you submit complete backup documentation to support your offer.
This is your chance to pay pennies on the dollar.
Even when other advisors do know about this available tax help, they do not take the proper, complete steps in filing the paperwork or do not follow up properly. The result is a rejection by the IRS and often, you pay much more than you should.
That is why it is extremely important to work with the right firm that has the experience and expertise to prepare your OIC properly each step of the way. The difference between doing it right and missing even a single, very minor step could mean missing out on saving thousands of dollars or more. Many people offer and pay much more than they should or even worse, wind up getting their settlement proposal rejected.
Don’t reduce your odds to near zero by refusing the best representation. You will also need representation while your Offer in Compromise is being processed. Remember, the longer you can delay the IRS from seizing your property, the better. It may take one to two years to complete the Offer in Compromise process.
The time line for an Offer in Compromise starts with the preparation of the various OIC forms and backup documentation. Next, the IRS may take up to 12-18 months processing your Offer in Compromise. Once processed, it should take 1-3 months to finalize the Offer and make a payment arrangement.
Based on the latest statistics, the IRS takes an average of 380 days to process an OIC application. Your processing time may be shorter or longer.
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