If you are facing an overwhelming federal tax debt problem, then you may want to consider pursuing an IRS offer in compromise, frequently called the “OIC” program. So exactly what is an OIC? The IRS, at its discretion, is authorized to accept less than full payment of your delinquent tax debt. This is commonly referred to as a tax settlement offer. They are able to do this if there is a doubt as to whether they will ever collect the full amount of your tax debt or if there is a doubt as to whether the tax liability is actually owed by you. The IRS Offer in Compromise provides a significant amount of tax relief if the taxpayer is approved. The goal of the Offer and Compromise is to reach a compromise settlement offer that is in the best interest of both the IRS and the taxpayer. This IRS reduction of delinquent tax debt also includes past due penalties and interest. Not surprisingly, the IRS does not easily reduce or “compromise” a tax debt liability. For this reason, a low % of IRS Offer in Compromise applications are actually approved each year.

Understanding a few key points about the IRS offer in compromise program is helpful. The amount of money you owe the IRS is not considered relevant. What is deemed important is your financial ability to pay your IRS tax owed. The IRS requires you prove two things before they will accept your Offer in Compromise. First, you must prove your asset value is low or nominal. Second, you must prove your monthly allowable expenses are equal to or exceed your monthly income. The IRS does not let you use all of your monthly expenses when you calculate whether your monthly expenses equal or exceed your monthly income. You are only permitted IRS allowable monthly expenses which often have monetary limits on them. As a result you will not be allowed to claim the entire amount you spend on certain allowable expenses. The “20 percent rule” is another important point to mention. The IRS requires that 20% of your compromise offer amount be submitted with the Offer in Compromise application. This amount is non refundable, and any offer submitted without these funds will not be considered by the IRS. Clearly, this makes the accurate and proper filing of the IRS Offer in Compromise application critical. This is a primary reason it is wise to use professional IRS tax help to handle the Offer in Compromise filing. If the IRS Offer in Compromise is approved, then full compliance with all future IRS tax filings and payment requirements is mandatory.

Delinquent taxpayers often investigate how to do an Offer in Compromise on their own. This is not something that is prudent if your ultimate goal is to be approved for OIC tax relief. The Offer in Compromise tax settlement program has complex rules and guidelines which require multiple forms be completed with exact accuracy. IRS tax attorneys are equipped with the industry knowledge and experience to increase a taxpayer’s chances of success in securing an Offer in Compromise settlement. Keep in mind that an important part of your healthy financial future is undoubtedly riding upon the outcome of this offer and compromise. Having IRS tax attorneys and specialists in your corner vigorously fighting for your rights as a taxpayer can make all the difference. To proceed with your free tax evaluation Click Here.

If you would like to research a DIY (“do it yourself”) approach for an IRS Offer in Compromise, you will need to prepare Form 656, Offer in Compromise. In addition to Form 656, you must also complete Form 433-A, Collection Information Statement for Wage Earners and Self Employed Individuals. This form is used to document your unique financial circumstances. For instructions on how to prepare Form 433-A, Click Here. The IRS uses all this information to determine the collection potential of your delinquent tax debt. Accurately preparing IRS Form 656 and IRS Form 433-A are crucial in the Offer in Compromise process. You have nothing to lose by still exploring professional IRS tax help for your IRS offer in compromise. Our reputable OIC tax specialists are available to assist you and the tax review is complimentary.