IRS Offer in Compromise – How to Get Your Offer Accepted

If you are unable to pay off your tax debt in full, one payment, then you should take advantage of the IRS Fresh Start Initiative program. Since 2008, the IRS has offered alternative methods to paying off tax debt for individuals along with business owners. One of the methods under the program is called the Offer in Compromise. Even though our tax firm is located in Los Angeles, Southern California, we actually represent taxpayers in all 50 states.

What is the Offer in Compromise (OIC)?

This is a method used by the IRS to settle back tax debt with individuals and business owners when the amount is too much to pay in one go. This means taxpayers who have tax debt higher than is comfortable for them to pay off due to their financial situation. An OIC is a process where the IRS may reconsider the amount that is owed and adjust for those who are qualified.

How Does OIC Work?

Basically, this is a compromise offer that you send to the IRS which reduces the total amount of taxes owed to a sum that fits within your current financial situation. The IRS reserves the right to accept or reject the offer, but they will make their decision based on whether they feel that a reduced amount is greater than what could be expected if no deal is reached.

This means that the situation of the individual will be considered in terms of their current financial state and other appropriate factors. In creating a proposal for compromise, you may want to consult with a knowledgeable, experienced tax representation firm that has a strong reputation in working through the OIC process.

If you file a compromise, the IRS will asses the total amount of unpaid taxes and from that analyze whether you can pay that amount. If they agree that your current financial situation and potential future situation will not allow for the full payment of your outstanding tax debt to be made, they may agree with the settlement you provided or perhaps ask for another amount. It all depends on several factors which will be unique to your situation.

Even though our tax firm is located in Los Angeles, Southern California, we actually represent taxpayers in all 50 states.

Get a free case evaluation today at 1-877-788-2837.

Am I Eligible for OIC?

There are several factors that determine eligibility, some of which are in your control. You may need professional assistance in this regard to ensure that you do qualify.

  • Current Tax Lien
  • Default Installment Agreement
  • Future Concerns about Income or Bankruptcies

All these factors the IRS will consider when looking over your proposal. In addition, you may consult with our professional tax representation firm that may offer you greater insight into what makes you eligible and ways to pay off your back tax debt.

What Factors Will the IRS Use to Assess a Compromise Offer?

There are three basic factors that the IRS relies upon to evaluate an Offer in Compromise made by you. Each factor will be looked over and any additional information deemed appropriate will be considered when they assess your offer.

Collectability Doubts: Basically, if the IRS believes that collecting the full amount owed from you will be difficult to impossible, that improves your chances that the offer will be accepted. They will look over their current methods which includes forced collections and evaluate what avenue offers the best means of collecting the tax debt.

At that point, they will check your monthly net income, subtract necessary expenses, and project your future income as part of their assessment. Of course, if the IRS believes that other methods will result in collecting the full amount, then your offer will probably be rejected.

Liability Doubts: If the IRS determines that due to an error in examining your tax debt, a lack of evidence to support the findings of the evaluation, or new evidence that demonstrates that the tax debt is in error, then the IRS may support your compromise as what you actually owe. If you have evidence demonstrating that the IRS is mistaken about the amount you owe, then you should provide it as part of your OIC.

Administration of Tax Debt: Basically, if you have special circumstances that causes financial hardship based on the current amount of the tax debt, then the IRS may consider a compromise proposal.

Even though our tax firm is located in Los Angeles, Southern California, we actually represent taxpayers in all 50 states.

Get a free case evaluation today at 1-877-788-2837.

Are There Actions I can take to Help My Case?

There are several things you can do in helping your case to make an Offer in Compromise stand a better chance of being accepted.

  • Always File Your Taxes
  • No Bankruptcy Proceedings
  • Include All Details of Your Financial Situation

They may not help, but they cannot hurt your case if you keep everything up to date. A bankruptcy proceeding will need to be dealt with first and including all details of your financial status means that the IRS will not be discovering something later which may alter their decision.

Can the IRS Re-Open the Debt Even After It has Been Paid?

Absolutely. If the IRS discovers that the amount paid was not enough or if you do not pay your taxes for the next five years, then the IRS may charge you the full amount instead of what was compromised. So, even if you finish paying off the old debt under the compromise agreement, if you fail to file, pay all your taxes over the next five years, then you may find that your compromise is rejected, and you will have to pay the remaining amount of the full tax debt.

Do I Need Professional Assistance?

It depends on your situation, but generally speaking having a reputable tax representation firm by your side offers strong benefits. They will have the knowledge and experience in working with the IRS while protecting your rights under the law. This means that they can take the information your provide, compare that with what the IRS uses to evaluate your compromise proposal, and let you know if it’s the best course of action.

Our specialized knowledge and years of experience will benefit you greatly when creating a compromise that the IRS would accept. Plus, you will get the right advice, so you can make the best-informed decision about what action to take in solving your back tax debt.

Even though our tax firm is located in Los Angeles, Southern California, we actually represent taxpayers in all 50 states.

Get a free case evaluation today at 1-877-788-2837.

Client Reviews
★★★★★
Mike has given us peace of mind! He helped negotiate down a large balance and get us on a payment plan that we can afford with no worries! The stress of dealing with the IRS is huge and Mike helped us through it all. The peace of mind is invaluable, thank you Mike! April S.
★★★★★
Mike Habib - Thank you for being so professional and honest and taking care of my brothers IRS situation. We are so relieved it is over and the offer in compromise process went just as you said. Mike is very professional and will give you honest answers to the OIC process and you can really trust him. You won't be sorry you chose him! Joe and Deborah V.
★★★★★
Mike is a true professional. He really came thru for me and my business. Dealing with the IRS is very scary. I'm a small business person who works hard and Mike helped me see that they are not that scary after all. He was always there with the answers I needed and was very good about calling me back which I appreciated since your first reaction is to freak out and ask a million questions. He solved a messy case and worked very hard to resolve it. His rates are VERY reasonable for the amount of work he does! I give him my highest recommendation! Marcie R.
★★★★★
Mike was incredibly responsive to my IRS issues. Once I decided to go with him (after interviewing numerous other tax professionals), he got on the phone with the IRS immediately (as in the same day I signed with him) to squash an impending issue. And he worked directly with them to quickly come to a resolution I am very happy with. I'd highly recommend reaching out to Mike to see if he can help you with any IRS issues. I'm very satisfied! Marshall W.
★★★★★
I’ve seen and heard plenty of commercials on TV and radio for businesses offering tax help. I did my research on many of them only to discover numerous complaints and unresolved tax issues. I found Mike Habib through my own online search and contacted him. He was very professional with great communication, always answering my questions and concerns. Mike resolved my complicated tax problem just as he said he would. I would definitely recommend his services to family and friends. Nancy & Sal V.
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