Independent Accounting Services

Independent Accounting Services

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IRS Offer in Compromise Program

Independent Accounting Services
provides Offer In Compromise IRS debt resolution services

 

THE IRS OFFER IN COMPROMISE (OIC) PROGRAM

Simply stated, the IRS Offer in Compromise (OIC) Program authorizes the IRS to compromise (reduce) outstanding tax obligations with financially burdened taxpayers for less than the full tax due. The IRS makes a deal with you to pay all you can reasonably afford and forgives any remaining balance.

 

The obvious advantage of the OIC is that it gives you the chance to begin your financial life anew without pressing tax claims. While you must pay the IRS something, this amount may represent a very small fraction of what you owe. The OIC provides a systematic and rational way for you and the IRS to agree on a fair, equitable, and realistic way for you to end your tax difficulties.

 

There are several minor disadvantages to an OIC:

- An accepted OIC is public record for one year.

- Unaccepted offers remain confidential and are not public record.

- You must comply with all provisions of the Internal Revenue Code for filing your returns and paying your taxes for 5 years from the date the IRS accepts your offer; otherwise the full amount of the liability is reinstated. This does not apply to “doubt as to liability” offers.

- An OIC also requires you to agree not to contest in court nor appeal the amount of your tax liability if your offer is accepted.

- You will lose all tax over payments (refunds), including interest, for tax periods extending through the calendar year that the IRS accepts the offer, to the extent such application of refunds is necessary to pay the uncompromised liability. Even without the OIC, the IRS would automatically offset and apply these refunds to your tax liability so this is not a true disadvantage.

- Finally, the OIC process requires you to fully disclose to the IRS your entire financial history. This, however, is no more information than is provided for an installment agreement.

 

The opportunity to end your tax problems on terms you can afford should clearly outweigh the several disadvantages of an Offer in Compromise.

First Question - Who Will Prepare Your OIC?

Representing Yourself

Advantage: Save on professional fees. Usually though, the many disadvantages of representing yourself far outweigh the advantage of saving on fees. These disadvantages include:

You lack the professional’s expertise on how to get your very best deal. Odds are that on your own you will offer the IRS far too much to settle. It’s false economy to save a few dollars on professional fees only to needlessly pay the IRS many times that amount in an overly generous settlement.

- Most taxpayers are far happier to keep their distance from the IRS and prefer to leave the sparring to their advisers. You may be too frightened, frustrated or intimidated by the IRS to effectively or comfortably handle your OIC.

You may slip up and make statements that can get you into even more trouble perhaps an audit or even criminal prosecution. You must always be careful about what you say to the IRS. Professionals know where to draw the line. One careless comment can get you into even bigger trouble!

You’d have to take valuable time away from your work and more pleasant pursuits to wrestle with your own case. This would likely lead to procrastination, and a mushrooming tax liability bill.

 

Hiring A Tax Professional Options:

1) Attorneys2) Certified Public Accountants3) Enrolled agents

Tax professionals can be costly. Their fees range from $25 per hour for an Enrolled Agent or new Accountant in a rural area, to $300 or more per hour for a seasoned Tax Lawyer in a major city. And most Tax Consultants won’t agree to a fixed fee to handle your OIC. They can’t possibly anticipate how many hours will be required because they can’t foresee the numerous contingencies or IRS stubbornness in negotiating a final agreement. Unless you have an exceptionally large tax liability or a very hostile officer, your fee should be under $5,000 and is more often about $2,000 to $3,000 for a simpler OIC. Any OIC involves too much paperwork to expect substantially lower fees. Some tax professionals will agree to a contingent fee or a fee that’s a percentage of the savings. 

 

- This information is taken from Arnold S. Goldstein, - Nationally recognized OIC Expert, Tax Attorney & Author of “Settle With the IRS for Pennies on the Dollar”

 

We give you access to all 3 of these options. But our stated company mission is:

"Top-shelf services without charging top-shelf rates & fees"

- Give us a call -