IRS Offer in Compromise Help | Tax Settlement

Dealing with tax debt is incredibly stressful and often financially debilitating, but it’s much easier when you have the right assistance. At East Coast Tax Consulting Group, we help clients navigate the IRS’s offer in compromise program, which allows eligible taxpayers to settle their tax debts for less than the amount owed.

If you’re struggling with tax debt that’s grown too big to be realistically paid off, let us help you decide if this is the right option for you. Then, lean on our expertise to secure the best settlement possible on your back taxes.

What Exactly Is an Offer in Compromise?

An offer in compromise (“OIC”) is when the IRS agrees to settle a tax debt for an amount that’s less than the total bill. It’s sometimes referred to by tax relief companies as tax forgiveness. The IRS can grant an OIC request for any of the following reasons:

• Doubt as to liability: The IRS accepts a lower amount because there’s a genuine disagreement as to the amount or existence of the tax debt.
• Doubt as to collectibility: The IRS accepts a lower amount because it doesn’t believe the taxpayer can realistically pay the full amount due. This situation often arises when the taxpayer lacks the income and assets to pay the full tax owed. This might be the most common reason taxpayers apply for an OIC.
• Effective tax administration: The IRS sometimes agrees to resolve a tax debt for a reduced amount because collecting the full amount would impose an unreasonable economic hardship on the taxpayer or be unfair or inequitable due to the circumstances.

When To Consider an Offer in Compromise

Ideal candidates for an offer in compromise are those who:

• Would suffer unreasonable economic hardship by paying the full amount.
• Can’t afford to use other tax resolution options.
• Have recently suffered a notable reduction in income that’s permanent.
• Have limited assets or property equity.
• Can afford to pay something in a lump sum or periodic payments over two years.

If you’re receiving collection notices, including letters about tax liens or wage garnishment, it’s critical to take action before IRS collections escalate. Reach out to us today to talk about an IRS offer in compromise and other tax debt resolution options.

Offer in Compromise Eligibility

Basic eligibility involves being compliant with any current tax payment or filing obligations and not being in an open bankruptcy. If you apply without meeting these eligibility requirements, the IRS will return your application, refund the application fee, and apply any initial offer payment to your existing tax balance.

That’s why it’s critical to work with an experienced, trustworthy professional who ensures you’re eligible and highly likely to get approved before they file your application with the IRS. Unfortunately, inexperienced professionals often steer clients in the wrong direction, applying for settlements when the taxpayer isn’t eligible or when a better option would be more effective.

Financial Review Before OIC Submission

The IRS bases acceptance on your financial situation. If they believe you can afford to make monthly payments or pay off the debt in full, they will not accept the offer. That’s why the process starts with a financial analysis, including:

• A review of your IRS tax transcripts.
• An analysis of your income, bills, assets, and debts.

Using this information, our team can confirm exactly how much you owe, how much income and asset equity you have available, and whether an offer in compromise is the right option for you.

How the Offer in Compromise Process Works

Here’s a look at the process when you work with East Coast Tax Consulting Group to apply for an offer in compromise:

• File back tax returns if needed and ensure you’re up to date with quarterly estimated payments or payroll deposits if applicable.
• Calculate the offer the IRS is likely to accept based on the IRS’s allowable expenses and your unique financial situation.
• Prepare the OIC application paperwork, including IRS Form 656, Form 433-A (OIC) for individuals, and IRS Form 433-B (OIC) for businesses.
• Submit your OIC application to the IRS, along with the initial payment and application fee.
• Keep you updated as we wait for the IRS to process the application.
• Help you make a plan to stay current with tax payments moving forward, if needed.

The IRS rejects the majority of OIC applications. Unfortunately, that’s because taxpayers often apply when they’re not eligible, either by completing the application on their own or by working with a professional who doesn’t understand the process.

At East Coast Tax Consulting Group, we’ve helped countless taxpayers successfully obtain settlements on their IRS tax debt through the offer in compromise program. Check out this success story to learn more about how we use our experience to drive real results for clients.

Alternative IRS Tax Resolution Options to an OIC

If an offer in compromise doesn’t make the most financial sense for your unique situation, we’ll help you consider other OIC alternatives, such as:

• Installment agreement
• Currently Not Collectible (CNC) status
• Penalty abatement

The goal is to resolve your tax debt as efficiently as possible, while also saving you the most money possible. Sometimes an offer accomplishes this, but other times, another form of tax relief may serve you better, and we’ll help you figure that out.

Why Work With East Coast Tax Consulting Group

If you’re thinking about an offer in compromise, East Coast Tax Consulting Group is here for you. We prioritize high-quality customer service, timely communication, and personalized solutions for our clients. When you work with us, you work directly with a highly experienced CPA who’s committed to finding the best resolution for you.

To learn more, schedule a free consultation today. You can contact us online or by calling (866) 550-7655.

IRS Offer in Compromise FAQs