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The Offer in Compromise: Solving Your IRS Problems
The IRS struggles every year to collect unpaid taxes. Interest and penalties accrue on all tax debts until paid and often penalties and interest can equal two or three times the original tax amount. However, the IRS and Congress soon realized that getting something was better than nothing and that it made sense to forgive tax debt if at least some portion of the tax was recovered. This resulted in the Offer in Compromise program.
The IRS has made great strides in improving the processing of OICs. These efficiencies are making it easier for taxpayers to navigate the OIC process and enable them to receive responses in a timely manner.
When an OIC is submitted, the IRS will verify that it can process the offer. The offer will be processed if the taxpayer has: (1) paid the $150 application fee; (2) filed all back tax returns; (3) is not actively involved in a bankruptcy proceeding; and (4) not been involved in an on-going audit.
If the IRS sends you a response, make sure that you respond promptly. You may only have a few weeks to get the final information prepared and submitted back to the IRS. Failing to timely respond is often a reason for rejection.
The taxpayer has a few weeks to respond with the requested items. If the response is not timely, the IRS can return the offer and dismiss the offer if need be. If the offer is returned, the IRS will not refund the processing fee.
The IRS then assesses the taxpayer's potential for collection. As a result, the agency has the right to accept the IRS offer in compromise as it was submitted originally. They often may send a letter summarizing the collection potential analysis. The taxpayer has the right to respond to the analysis with any documentation necessary or can dispute the IRS findings. The taxpayer also has the right to accept the IRS' analysis and agree to increase their offer to the amount that is shown in the analysis letter.
Hiring an offer in compromise attorney can help you improve the chance that your offer will get accepted. At a minimum they can review your situation and provide you valuable information that will allow you to make an informed decision.
About the Author About the author: If you are looking for FREE resources on how to get offers in compromise approved, please click here === The Offer in Compromise. Should you require more resources or are looking for valuable information on completing an offer in compromise please visit our site here === offer in compromise new.
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