Negotiate OIC/Tax Debt Settlements

Offer in Compromise Settlement / IRS Tax Debt Settlements + Former agents, we know the system

Affordable Settlements. You can settle for less by knowing the system.
You can engage a Former IRS Agent, who specialized in Offer in Compromise Settlements as a Former IRS Agent. Since 1982.
As a former IRS agent and teaching instructor with the IRS, we know all the settlements, protocols, and necessary techniques to help you settle your case for the lowest amounts allowed by law.
There are very exacting procedures to get an offer in compromise settlement approved by the Internal Revenue Service.

5 Facts about the Offer in Compromise Settlements

The average Offer in Compromise Settlement takes between 6- 9 months to work by the IRS,
The average Offer in Comprise settlement is 14 cents on a dollar,
38% of all offers in compromise are accepted by the IRS,
All accepted Offers in Compromise Settlements are a matter of Public record,
The average time it take the IRS to work an Offer in Compromise is between 10 – 20 hours.

IRS Payment Plans

Over 6 million taxpayers enter into IRS payment plans, installment agreements or monthly payments each and every year in back taxes.

Taxpayers must complete and fully document IRS form 433F that you can find directly on our website to get in IRS payment plan.

The Internal Revenue Service will take a close look at your income and your expenses and will compare those to the national standards found in your region that you live in.

It is extremely important to hire a tax professional who knows the system to get an IRS payment plan that is both fair to you in the Internal Revenue Service.

Taxpayers are unrepresented will find that the IRS will want more than you are willing to pay. Do not be bullied by the IRS.

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The Offer in Compromise Settlement Program

The new Fresh Start Program offered by the IRS is making life simple for those who qualify for an Offer in Compromise Settlement however a professional tax company has a much better chance of getting Offers in Compromise accepted because they understand the guidelines the Internal Revenue Service has set forth.

The filing of an Offer in Compromise Settlement and settling back taxes is much more than filling out the paperwork and submitting it to the IRS.

Our experience staff has former IRS agents who have worked the Offer in Compromise (OIC) program while at the IRS.

They have the knowledge necessary to get Offers in Compromise through the system if you qualify for the program.

Before an Offer in Compromise is filed, all the facts and your current financial statement need to be reviewed.

Before you spend any money or waste your time, let our staff walk you through the process. We have been processing Offers in Compromise for a combined 60 years just with the IRS alone.

There is a New Pre-Qualifier Tool on our Website

To crack down on the amount of offers in compromise that are filed, the IRS has put out a new pre-qualifer tool to make sure that taxpayers are qualified and suitable candidate so they do not waste their time and money filing an offer compromise that has no chance of being accepted.

You can look at our homepage, click on IRS forms, and click on the pre-qualifier tool and you can walk through the information yourself to see if you qualify for offer compromise.

You should not give your money to any firm or tax professional unless you’re a truly qualified candidate for an offer in compromise

The Offer In Compromise Settlement

An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed.

If the tax liabilities can be fully paid through an installment agreement or other means, the taxpayer will in most cases not be eligible for an OIC.

In order to be eligible for an OIC:

the taxpayer must have filed all tax returns,
made all required estimated tax payments for the current year, and
made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees.

The IRS will not accept an OIC Settlement unless the amount offered by the taxpayer is equal to or greater than the reasonable collection potential. The RCP is how the IRS measures the taxpayer’s ability to pay.

The RCP includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property. In addition to property, the RCP also includes anticipated future income, less certain amounts allowed for basic living expenses.

The IRS may accept an Offer in Compromise Settlement based on three grounds.

Doubt as to Liability.
- Acceptance is permitted if there is doubt as to liability.
- This ground is only met when genuine doubt exists under applicable law that the IRS has correctly determined the amount owed.
Doubt to Collectability.
- Acceptance is permitted if there is doubt that the amount owed is fully collectible.
- This means that doubt as to collectibility exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability.
Effective Tax Administration.
- Acceptance is permitted based on effective tax administration.
- An offer may be accepted based on effective tax administration when there is no doubt that the tax is legally owed and that the full amount owed can be collected, but requiring payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.The acceptance of these offers are very difficult to get accepted.

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Submission of the Offer in Compromise Settlement

When submitting an OIC based on doubt as to collectibility or based on effective tax administration taxpayers must use the most current version of:

Form 656 (PDF), Offer in Compromise, and
also submit Form 433-A (OIC) (PDF), Collection Information Statement for Wage Earners and Self-Employed Individuals,

and/or Form 433-B (OIC) (PDF), Collection Information Statement for Businesses. A taxpayer submitting an OIC based on doubt as to liability must file a Form 656-L (PDF), Offer in Compromise (Doubt as to Liability), instead of Form 656 and Form 433-A (OIC) and/or Form 433-B (OIC).

Application Fee for the Offer in Compromise Settlement

A taxpayer must submit a $150 application fee with the Form 656. Do not combine this fee with any other tax payments.

There are, however, two exceptions to this requirement.

No application fee is required if the OIC is based on doubt as to liability.
The fee is not required if the taxpayer is an individual (not a corporation, partnership, or other entity) who qualifies for the low-income exception.

This exception applies if the taxpayer’s total monthly income falls at or below 250 percent of the poverty guidelines published by the Department of Health and Human Services. Section 4 of Form 656 contains the Low Income Certification guidelines to assist taxpayers in determining whether they qualify for the low-income exception.

A taxpayer who claims the low-income exception must complete section 4 of Form 656.

Selecting your Offer in Compromise Settlement Terms

Taxpayers may choose to pay the offer amount in a lump sum or in installment payments.

A Lump Sum Offer Settlement

A “lump sum offer” is defined as an offer payable in 5 or fewer installments and within 24 months after the offer is accepted. If a taxpayer submits a lump sum offer, the taxpayer must include with the Form 656 a nonrefundable payment equal to 20 percent of the offer amount. This payment is required in addition to the $150 application fee.

The 20 percent amount is called “nonrefundable” because it cannot be returned to the taxpayer even if the offer is rejected or returned to the taxpayer without acceptance. The 20 percent amount will be applied to the taxpayer’s tax liability.

The taxpayer has a right to specify the particular tax liability to which the IRS will apply the 20 percent amount.

Periodic Payment Offer in Compromise Settlement

The offer is called a “periodic payment offer” under the tax law if it is payable in 6 or more monthly installments and within 24 months after the offer is accepted. When submitting a periodic payment offer, the taxpayer must include the first proposed installment payment along with the Form 656.

This payment is required in addition to the $150 application fee. This amount is nonrefundable, just like the 20 percent payment required for a lump sum offer. Also, while the IRS is evaluating a periodic payment offer, the taxpayer must continue to make the installment payments provided for under the terms of the offer.

These amounts are also nonrefundable. These amounts are applied to the tax liabilities and the taxpayer has a right to specify the particular tax liabilities to which the periodic payments will be applied.

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The Statutory Period of Time Rule

Ordinarily, the statutory time within which the IRS may engage in collection activities is suspended during the period that the OIC is under consideration and is further suspended if the OIC is rejected by the IRS and where the taxpayer appeals the rejection to the IRS Office of Appeals within 30 days from the date of the notice of rejection.

If the IRS accepts the taxpayer’s offer, the IRS expects that the taxpayer will have no further delinquencies and will fully comply with the tax laws.

If the taxpayer does not abide by all the terms and conditions of the OIC, the IRS may determine that the OIC is in default.

For doubt as to collectibility and effective tax administration OICs, the terms and conditions include a requirement that the taxpayer timely file all tax returns and timely pay all taxes for 5 years from the date of acceptance of the OIC.

When an OIC is declared to be in default, the agreement is no longer in effect and the IRS may then collect the amounts originally owed, plus interest and penalties.

Additionally, any refunds due within the calendar year in which the offer is accepted will be applied to the tax debt.

If IRS rejects the Offer in Compromise Settlement

If the IRS rejects an OIC, then the taxpayer will be notified by mail.

The rejection letter will explain the reason that the IRS rejected the offer and will provide detailed instructions on how the taxpayer may appeal the decision to the IRS Office of Appeals.

The appeal must be made within 30 days from the date of the letter.

In some cases, an OIC is returned to the taxpayer, rather than rejected, because the taxpayer has not submitted necessary information, has filed for bankruptcy, has failed to include a required application fee or nonrefundable payment with the offer, or has failed to file tax returns or pay current tax liabilities while the offer is under consideration.

A return is different from a rejection because there is no right to appeal the IRS’s decision to return the offer.

The New Fresh Start Program by the IRS – Offers in Compromise Settlement (OIC)

The Offer in Compromise program permits qualified taxpayers with outstanding and unpaid tax liabilities to negotiate a full settlement for an amount that is less than the tax owed.

An OIC agreement generally will not be accepted by the IRS if it believes that the outstanding liability can be paid through a lump sum or other type of payment arrangement.

The IRS typically reviews the taxpayers’ income, expenses, assets and liabilities in great detail to make a determination regarding the taxpayers’ ability to pay.

In an effort to expand this program to a greater number of struggling taxpayers, the IRS has become more flexible in what it deems “ordinary and necessary” expenses in arriving at a taxpayer’s net monthly income.

Specifically, under the “Fresh Start Program,” the IRS has expanded the Allowable Living Expense Category to include additional expenses, such as credit card payments and bank fees, while increasing the total amount allowable.

The program also allows expenses for the repayment of student loans and delinquent state and local taxes. IRS has really tried to help the struggling taxpayer.

The most significant change to the OIC program under the “Fresh Start” initiative is the change in the calculation of the taxpayer’s “reasonable collection potential” under the future income component.

The “reasonable collection potential” (RCP ) is determined by analyzing the taxpayer’s net realizable equity in assets and future income.

The IRS now considers only one year of future income for offers that will be paid in full within five months when previously they considered four years of income.This is a huge change because the multiplier was such a huge number and scores of taxpayers could never pay off the offer.

The IRS will now consider two years of future income for offers paid in full within six to 24 months, down from five years of income.

For taxpayers whose reasonable collection potential is driven by future income and less by net realizable equity in assets, this change is likely to have a meaningful impact in the determination of whether they qualify for an OIC.

The overall result of these changes and improvements is that increasingly more financially troubled taxpayers will qualify for OIC relief.

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Some Negative Implications

Apart from these favorable changes, there may still be negative implications of filing an OIC.

A potentially negative repercussion is that information provided through the OIC would provide the IRS with a financial road map for seizure and enforced collection action in the event the offer is rejected or withdrawn or the taxpayer defaults on the offer.

As a former IRS agent myself, any offer I received gave me a direct avenue to collect the tax if I rejected the offer and I had every potential collection tool available for me based on the current financial statement provided to me by the taxpayer.so use caution.

What IRS will check if you submit an Offer in Compromise

Be fully apprised the IRS will conduct a:

Full Google Search,
Get a copy of your credit reports,
Check the Accuriant Search Engines,
Pull licenses searches,
May also use Lexis Nexis

Noteworthy – Submission of an Offer in Compromise will automatically extend the statute of limitations for collection during the duration of the offer, plus 30 days, which will give the IRS more time to try to collect the full balance owed.

We will provide straightforward answers to questions about an Offer in Compromise.

Does an Offer in Compromise apply to me?
How much can I settle my tax debt for with the IRS?
What are my Offer in Compromise payment options?
What factors affect the settlement outcome with an Offer in Compromise?

A Footnote

The IRS is not bound by either the offer amount or the terms proposed by the taxpayer. The OIC investigator may negotiate a different offer amount and terms, when appropriate. The investigator may determine that the proposed offer amount is too low or the payment terms are too protracted to recommend acceptance.

Am I Eligible For An Offer In Compromise?

Important items to know about an Offer in Compromise:

You must be compliant for two consecutive quarters (six months) before an offer can be submitted.
The advantage of an OIC is that the amount you pay is considerably less than what is actually owed. All principal and interest stops accruing and most of the time enforced collection is suspended.
One of the rules for the OIC is that you must remain current and compliant for five years after acceptance.

Tax Debt Settlements Made Simple: Understanding OIC and Your Options

Tax debts may seem overwhelming, but with the right strategy, you can work toward effectively resolving them. The IRS’s Offer in Compromise (OIC) is one of the main tools at your disposal. It’s part of the IRS tax debt settlement program, designed to enable taxpayers to settle their debts for less than the full amount owed. Consider OIC as a negotiation window where you and the IRS can come to a mutually acceptable amount, making it feasible for you to pay off your debts.

But be aware of its nuances before thinking about applying for an OIC. Not everyone qualifies, and the application process does call for a good deal of supporting information. But, are you thinking how to settle with the IRS by yourself? It’s possible but often requires meticulous attention to detail. Just like in any negotiation, preparation is key. Familiarize yourself with the steps involved, and if you’re confident, you can proceed to negotiate with the IRS over back taxes.

Do you qualify for an OIC?

To qualify for an OIC, you must meet certain criteria. These include:

You must be able to show that you cannot afford to pay your full tax debt.
You must be able to make a monthly payment that is affordable for you.
You must be willing to enter into a payment plan with the IRS.
You must be able to provide financial information to the IRS.

The IRS will consider a number of factors when evaluating your OIC, including:

Your income and expenses
Your assets and liabilities
Your ability to pay your debt
Your willingness to cooperate with the IRS

Resolving Tax Debt Hassles: Your Guide to Successful OIC Settlements

No one likes to owe money, especially when it’s to the IRS. But life happens, and sometimes tax debts accumulate. The good news is that solutions like OIC exist to help you find a middle ground. While the Offer in Compromise sounds easy, the path to a successful settlement can be tricky. This is where professional IRS tax debt settlement help can come into play.

For those wondering how to navigate an OIC, remember that every taxpayer’s situation is unique. The IRS evaluates your ability to pay, income, expenses, and asset equity before accepting an offer. This is why understanding the details and crafting a well-thought-out offer is crucial.

If you’re hesitant about the process, seeking IRS compromise settlement agreements assistance can be invaluable. Experts in this area can guide you, ensuring that your OIC is presented in the best possible light. After all, the end goal is a resolved tax debt and financial peace, so every step taken towards that is a step in the right direction.

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Frequently Asked Questions

An Offer in Compromise (OIC) is a program by the IRS that allows taxpayers to settle their tax debts for less than the full amount they owe. It’s designed for those facing genuine financial hardship, making it impossible for them to pay the full debt.

Eligibility for an OIC is based on several factors, including your ability to pay, income, expenses, and asset equity. To be considered, you must be current with all filing and payment requirements and not be in an open bankruptcy proceeding.

An OIC involves proposing a settlement amount to the IRS, which, if accepted, will be less than your full owed amount. You must provide detailed financial information, and if accepted, you’ll need to stick to certain terms, like filing all tax returns and paying all taxes on time for the next five years.

The IRS might accept an OIC when they determine it’s unlikely they’ll collect the full owed amount from a taxpayer within a reasonable period. They’ll consider it if they believe the offered amount is the most they can expect to collect within a reasonable time frame.

The primary benefit is potentially paying less than what you owe, helping you get out of debt faster. It also halts collection activities and offers a fresh start towards financial stability without the looming burden of a significant tax debt.

Yes, you can negotiate an OIC on your own. However, the process can be complex, and having a tax professional can improve your chances of an accepted offer and ensure all requirements are met.

A tax professional can assess your financial situation, determine if an OIC is right for you, and help draft a compelling proposal. They can also guide you through the application process, ensuring all paperwork is accurate and submitted correctly.

The amount is determined by the IRS based on what they believe you can reasonably pay. They consider your income, assets, expenses, ability to pay, and whether paying the full amount would cause financial hardship.

Yes, having assets doesn’t automatically disqualify you. However, the IRS will consider the equity in your assets when determining your ability to pay.

If the IRS accepts your OIC and you fulfill all terms, including payment, federal tax liens may be released. However, the IRS will typically not release a lien until the offered amount has been fully paid.

If your OIC is rejected, you can appeal the decision within 30 days. You’ll also have the option to establish an alternative payment plan or explore other relief options.

The duration varies based on individual circumstances, but the process can take anywhere from several months to a year or even longer. It depends on factors like the complexity of your case, IRS backlog, and how quickly necessary information is provided.

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Negotiate OIC/Tax Debt Settlements