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Offer In Compromise

An OIC is a settlement agreement for an amount you can live with as payment in full of your debt. You’ve heard of “pennies on the dollar,” and that is exactly what this agreement is. The “Granddaddy” of IRS debt relief is now easier than ever if you’ve got the right advocate in your corner.

This debt settlement program isn’t an easy one.  Detailed information about your income and expenses must be gathered and analyzed. I also look at your assets (business and personal), look at your debts and determine the equity you have. There are also a series of questions about legal proceedings including bankruptcy must be answered. Together, we investigate what the RCP (reasonable collection potential) is computed to be and then make a determination of an offer amount. This amount (if approved) can be paid in one lump sum or spread out over months or years. I can even offer strategies to increase your chances of acceptance.

If rejected, there are still effective steps that can be taken to result in a successful offer. The amount offered can be adjusted. We can ask for reconsideration or even appeal the Offer. The IRS doesn’t want to get sued over the Offer (called “hazards of litigation”) and will work to find a solution agreeable to both parties.

The fine print includes:

  • The fee to file an Offer is generally $186 (unless you meet the low income guidelines)
  • While being considered, the amount you send in as a down payment and fee is non-refundable and will be applied to your tax liability
  • A Notice of Federal Tax lien will be filed
  • Other collection activities are suspended
  • The legal assessment and collection time is extended
  • You do NOT have to make any payments on an existing installment agreement
  • Your offer is automatically accepted if no determination is made within two years of their receipt of your offer
  • Future refunds for the year your Offer is accepted is kept by the IRS as well as the year after that