Offer In Compromise
- IRS Representation Services
- Eligibility Based on Debt Amount
- Expert Negotiation
- Long-Term Financial Freedom
Settle Your Tax Debt for Less Today
For Those Who Owe Less Than $50,000
- Easier Eligibility: Taxpayers with smaller debt amounts often find it easier to qualify for an OIC. The IRS may perceive them as less able to pay the full amount, increasing their chance of acceptance.
- Lower Lump Sum Offers: Smaller debts often mean that taxpayers can make lower lump-sum offers more likely to be accepted by the IRS.
- Reduced Financial Disclosure: Taxpayers owing less than $50,000 may not need to disclose as much financial information as those with larger debts., making the process less invasive and more straightforward.
- Increased Chance of Approval: The IRS may be more inclined to accept an OIC for smaller debts as it's more cost-effective for them to settle than to pursue full payment.
- Psychological Relief: Settling for a lesser amount can provide significant mental and emotional relief.
For Those Who Owe More Than $50,000
- Significant Debt Reduction: An OIC can potentially remove a significant financial burden by reducing the amount owed by a considerable margin for larger debts.
- Avoidance of Severe Collection Actions: Settling large tax debts through an OIC can prevent severe actions like liens or wage garnishments, which the IRS might otherwise use to collect larger debts
- Structured Payment Plans: While the lump sum might be higher, the IRS may offer more structured and extended payment plans for larger debts, making it more manageable for the taxpayer
- Financial Reorganization Opportunity: An OIC gives individuals and businesses a chance to reorganize their finances and start anew without the crippling effect of a significant tax debt.
- Long-term Financial Planning: Successfully negotiating an OIC for a considerable debt can be a significant step in long-term financial planning and stability
Shared Benefits for Both Groups
- Legal Closure: Once an OIC is accepted and paid, it brings legal closure to the tax issue.
- Fresh Start: It provides a fresh start, allowing taxpayers to move forward without the burden of past tax debts
- Avoidance of Additional Interest and Penalties: Once an OIC is accepted, additional interest and penalties generally stop accruing on the outstanding debt
The process can be complex, and the criteria for acceptance are stringent. When evaluating an OIC, the IRS considers the taxpayer’s income, expenses, asset equity, and ability to pay.
The odds of an Offer in Compromise (OIC) being accepted by the Internal Revenue Service (IRS) can vary significantly based on several factors. As of April 2023, the acceptance rates for OICs have fluctuated over the years, generally ranging from around 25% to 40%. However, these rates can change, and it’s essential to consider the specific circumstances of each case.
- Ability to Pay
The IRS evaluates the taxpayer’s income, expenses, asset equity, and ability to pay. If the offer realistically reflects the taxpayer’s capacity to pay, it’s more likely to be accepted.
- Accuracy of Information
The accuracy and completeness of the information and documentation provided in the OIC application play a crucial role. Misinformation or missing documents can lead to rejection.
- Compliance with Tax Laws
Taxpayers who are in compliance with all filing and payment requirements and have not engaged in fraudulent activity are more likely to have their offers accepted.
- Reasonable Collection Potential (RCP)
The IRS will consider the offer against its calculation of the taxpayer’s Reasonable Collection Potential, which estimates the taxpayer’s ability to pay over time.
- Negotiation and Representation
Taxpayers who work with tax professionals experienced in negotiating OICs may have a higher chance of acceptance, as these professionals understand the intricacies of the process and the IRS’s expectations.
- Recent Changes in Circumstances
If a taxpayer has recently experienced significant changes in financial circumstances (like job loss, medical issues, etc.), this might increase the chances of acceptance.
Schedule a Consultation
Professional help is essential to maximize the chances of a favorable outcome andincrease the likelihood of acceptance. Each case is unique, and general statistics maynot accurately predict the result of a specific case. Filing accurate and complete truthfulrequired information to the IRS is critical.
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