Do You Qualify for an Offer in Compromise?
If you are genuinely unable to pay your taxes, there is a provision called the Offer In Compromise (OIC) where you can pay less than the total you owe as full settlement. The IRS will consent to an OIC provided it is proven that payment of the OIC amount is more viable than having the case classified as uncollectable or to avoid a long-drawn settlement plan. The purpose of the OIC is to collect whatever tax amount that is within the ability of the taxpayer to pay at the earliest possible time thus avoiding any extra expenses by the government.
But the issue is whether or not you qualify for the OIC. To be considered for the OIC, you must submit detailed documents that show your ability or inability to pay the tax amount. Obviously, this arrangement cannot be for everyone so you must meet all requirements before the IRS would agree to an OIC settlement with you.
The other issue that is important to consider is who to help you file your OIC with the IRS. Many companies may portray themselves as able and willing to do so on your behalf for a fee or in some cases, even without a fee. The reality is that based on the stringent and detailed requirements set by the IRS, it would be impossible for any company to submit a successful application for you without a thorough study of your tax history and financial situation.
You should beware of firms that purport to file an OIC application for you free of charge. If they do so without a systematic and thorough review of your situation, the chances of your application being approved is just about nil. The fact is that it takes a lot of work to make a proper analysis of anyone's financial position to determine whether you stand a chance of qualifying for the OIC and any company that does so free of charge would be soon out of business.
In addition, filing an OIC application when you don't really qualify would be more detrimental to you than not filing it. The reason for this is that the statute of limitations that the government has on collecting your taxes is extended by the length of time your OIC application is pending approval plus another 90 days. The normal length of time the IRS takes to approve your OIC application can be 9 months or more. In the meantime, the waiting periods for other equally good alternatives of settling your taxes are also extended while your OIC request is pending approval. Is getting an OIC really worth the wait for you? In order to know the answer to this question, you need professional advice.
In view of all the complications of an OIC application, the best action to take is to engage a fully qualified tax expert specializing in IRS matters. If you want to have an experienced professional firm analyze your financial situation for OIC application purposes, visit http://getirshelp.com
Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.
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