An offer in compromise (OIC) is an agreement done between a person who pays taxes in the US and the IRS (Internal Revenue Service). In this agreement, the taxpayer will pay less than his tax debt. However, if the liabilities can be paid in full through an installment agreement or other related means, then the taxpayer is not eligible for an OIC.
How to Apply for an OIC?
The application for an OIC requires the applicant to disclose his financial assets, income and items that could cause an increase or rejection of OIC. At Enterprise Consultants Group, we discuss the pros and cons of the entire process. We also pre-screen our clients based on the same criteria that the IRS uses when evaluating an offer. If our client’s ultimate goal is the acceptance of OIC, then we will strive to increase his chances of acceptance.
Here at Enterprise Consultants Group, we are tough negotiators. We can minimize all issues associated with OIC, thereby, making it easier for you to get an acceptance. We encourage you to speak to one of our tax advocates today about your liability and the entire process of the OIC.
What is an Offer in Compromise?
The concept of OIC is simple. That is, you will make an offer to the government that you will settle your tax debt for a certain amount. In exchange, the IRS will seek a lump sum or an installment over a set period. You will also vow to comply within a five-year period and promise to pay on time for all filed tax liabilities to be wiped out.
To be eligible for the OIC program, you should have filed all your tax returns. You should have made all required estimated tax payments for the year and all federal tax deposits for the current quarter.
However, if you have a current open bankruptcy proceeding, you are not eligible for an offer in compromise. The reason for this is that an open bankruptcy proceeding and other financial debts are solved through this process only.
During the evaluation process of OIC, you should remember that the penalties and interest will continue to accumulate. In other words, you can only submit an offer for those tax years assessed by the IRS. As part of the application process, you should submit all required forms and fees.
It is also important to remember that offers in compromise are not the only option you can take to pay your tax debts. To know whether or not OIC is an ideal option to resolve your tax debt, please consult with our tax specialists at Enterprise Consultants Group (844) 485-1408.