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IRS Offer In Compromise

An offer in compromise (OIC) is the most preferred collection remedy to pursue, if you or your business qualify.  If IRS accepts your OIC, your tax liability is fully settled for less, often much less than your original tax liability.   Here is what you want, an IRS OIC acceptance letter  (click upper left arrow after reading):
IRS Offer In Compromise Acceptance Letter   If your IRS tax liabilities exceed $50,000, and if you file an I.R.S. OIC and represent yourself or your business entity, your OIC will not likely be IRS accepted so I advise you only hire a qualified tax attorney/CPA with decades of OIC prosecution experience to prepare, file, and prosecute your OIC.  With decades of experience, and as a tax attorney/CPA, I am an expert at IRS OIC practice with a very high IRS acceptance rate.  If you owe less than $50,000, generally you will not hire me nor any other lawyer because probably there is not enough at issue dollars to justify the legal expense to fully prosecute an IRS OIC.  I advise you call me for a free telephone consultation to determine if you are an OIC candidate, and to learn about OIC procedure and how to best proceed.

What Is An IRS Offer In Compromise?

An accepted IRS OIC is a contract, an agreement between you and IRS, to fully resolve your assessed but unpaid federal tax liabilities by paying less than what is owed to IRS.   Any taxpayer may file an OIC application including individuals, corporations, partnerships, and limited liability companies.   Even if a business entity still in business owes federal payroll taxes, that business entity may file an IRS OIC application.  

What Kinds Of IRS Offers In Compromise Are There?

There are two kids of IRS OICs:  {1} most commonly an OIC doubt as to collectibility (you or your business entity owes IRS but cannot afford to full pay), and {2} less common an OIC doubt as to liability (challenging liability).  This article discusses OIC doubt as to collectibility.   If you claim you or your business entity does not owe what IRS has assessed and seeks to collect, then call me for a free telephone consultation to further discuss.   I am an expert in both types of IRS OICs and have done many with a very high acceptance rate.

What Must Be Filed To Request IRS Accept Your Offer In Compromise?

In addition to the following, my clients get the added benefit of my initial filed legal brief making legal arguments with evidence, requesting that IRS accept the offer in compromise.  To file an IRS OIC, a business must file a completed Form 433-B, Collection Information Statement For Businesses, an individual must file a completed Form 433-A Collection Information Statement For Individuals, and either a business or individual must file a completed form 656.   Here is the current Jan. 2014 IRS OIC Form 656 Booklet (click upper left arrow after reading):  IRS Form 656 Offer In Compromise Booklet

How Is The IRS Offer Amount Determined?

An IRS OIC amount is a formula consisting of two components, a net asset equity component plus a future net monthly income component.   Here is how most OIC amounts are determined:

Fair Market Value of all Cash Assets

plus:  Fair Market Value (FMV) of all other assets, less a 20% discount of FMV, less 100% balance of secured debt

plus:  Net monthly income times 12 future months.

You need a qualified tax attorney/CPA to compile your form 433 Collection Information Statement because asset valuation and monthly net income are tricky and require considerable accounting skills.

The IRS Offer In Compromise Game – It’s Not Easy To Get IRS To Accept Your OIC!

Don’t be fooled by idiot representatives that claim getting IRS to accept an OIC is easy.  In truth, IRS is not in the business to accept OICs, rather, IRS is in the business to reject OICs.   Only a skilled tax attorney/CPA like myself has a reasonable probability of getting IRS to accept an OIC.  If you proceed to IRS OIC, expect a fight and realize that in order to get IRS to accept an OIC, you must fight on to the end, which means through an IRS Appeals case conclusion, or by United States Tax Court litigation decision {if IRS lawyers agree by stipulated decision and if the OIC was filed through collection due process procedure which is by far the best method to file an IRS OIC – SEE MY SEPARATE COLLECTION DUE PROCESS ARTICLE on the left of my home page}.  Generally, IRS’ Collection Division will reject nearly every OIC if more than $50,000 is owed, so be prepared to fight on past IRS rejection attempts.  IRS hopes you will give up after IRS’ Collection rejects, but the key to acceptance success is to fight on by timely filing an appeal.

Once you file an IRS OIC, IRS will procrastinate delay, on average for eight to fourteen months after the filing date.   Eventually, when IRS decides to consider your OIC, it will generally argue you undervalued your asset equity, understated your gross monthly income, and wildly overstated your monthly expenses, further arguing you are rich so full pay now.   I call this the fling the crap on the wall and hope it sticks approach.  Nearly every time IRS’ initially fabricates a fake financial condition that lacks truth and lacks economic substance.   The key to OIC acceptance success is knowing how to fight IRS’ incorrect offer amount allegations, then preparing and filing arguments and evidence packages attempting to negotiate an acceptable offer amount, and proceeding to higher level IRS managers nearly every time.

Because IRS is very OIC rejection oriented, and if you owe more than $50,000, you should hire a competent tax attorney/CPA in order to have a better than 50% probability that in the end, after an IRS fight, IRS managers will accept your OIC.  Here is an actual IRS Appeals’ OIC acceptance letter with the personal client information redacted(click upper left arrow after reading):  Actual IRS Offer In Compromise Acceptance Letter

Call me for a free telephone consultation if you owe IRS more than $50,000. You will be glad you did so.  (877) 895-2950.