Our
Tax Attorneys have extensive expertise with planning, preparing, and negotiating
Offers in Compromise (“OIC”). If you qualify, an Offer in
Compromise is frequently the ideal solution for resolving your delinquent
tax liability. In the last published IRS statistics, the IRS reports that
the average discount on accepted Offers was 88% (only 12 cents on the
dollar was paid by Americans with accepted OICs), and that the average
acceptance rate was 47.6%. Given the savings possibilities on accepted OICs, the experienced team of Tax Attorneys and Tax Specialists at Freedom specializes in the Offer in Compromise program and works very hard to see if our clients qualify for an OIC. Call us today to see if you qualify.
The OIC is still a relatively new IRS instrument created in 1992 by Section
7122 of the Tax Code. The two primary grounds under which an OIC can be
successfully negotiated with the IRS are: “doubt as to collectibility”
(e.g. the taxpayer is unable to pay the full burden), or “doubt
as to liability” (e.g. the taxpayer contends that they owe the debt).
There is a more recent third ground for acceptance, “effective tax
administration” (e.g. the IRS wants to get as much as they can,
and they may potentially think that 12 cents on the dollar is as good
as they can do on a taxpayer). For an Offer in Compromise to be accepted,
however, the taxpayer has the burden of proof that they either have no
possible means of paying the tax or that they do not actually owe the
tax.
The primary determinant on “doubt as to collectibility” is
based on a taxpayer’s personal financial profile; including income,
expenses, and assets. The IRS sets strict guidelines for income, allowable
expenses (categorized as: Living, Housing, Transport), and available equity
in owned assets. An additional benefit of submitting an OIC is that IRS
Restructuring Act prohibits the IRS from collecting a tax liability by
levy during the period in which the Offer is being processed, or 30 days
following rejection of an offer, or during the appeal of an OIC. This
window of non-collection is frequently a respite for our clients to avoid
any IRS collection actions, thereby securing additional time for clients
to pay and prevents the IRS from seizing any assets in the interim.
If accepted, payment terms for an Offer in Compromise can be in one of
three methods: cash (typically within 90 days of acceptance), short-term
deferred payment (paid within 24 months of acceptance), or a long-term
deferred payment plan (up to the remaining statutory period for collecting
the tax liability).
Call us if you have any questions about the IRS guidelines or the process
for preparing, submitting, and negotiating an Offer in Compromise at 1-800-455-6829.
