Understanding the IRS Offer In Compromise Program

Unpaid income taxes can create a nightmare scenario when a financially struggling or low income taxpayer's tax liability spirals out of control. The IRS can ruin your finances, both personal and business related, and it is astonishing how quickly a small amount of unpaid taxes can snowball into crushing income debt.

Fortunately, when you are no longer able to afford your income tax obligations, the IRS does offer potential options to help you reach an IRS settlement, at least when they consider settling to be a win-win situation for both you and the government. Despite their reputation, the IRS is much more willing to negotiate than most people realize.



IRS Settlement - The Best IRS Help - Flat Fee Tax Service

You will feel like you have been to moon and back when you receive your IRS settlement. Contact the best IRS help team at Flat Fee Tax Service, Inc. and find out if you are qualified and eligible to settle with the IRS for less.

One of the most useful tools the IRS offers to help you settle tax debt is known as the Offer In Compromise” (OIC) program.

The best IRS help team at Flat Fee Tax Service, Inc. details in this blog some of the most important things financially struggling or low income taxpayers should know about the Offer in Compromise (OIC) program and how it works.

What is the IRS Offer in Compromise (Fresh Start Initiative) program?

The IRS Offer in Compromise is a form of income tax debt settlement, allowing you to pay the IRS far less than what you originally owed on your income taxes. The Offer in Compromise program is meant to serve as relief for taxpayers, who are financially struggling and/or low income, who cannot afford their income tax bill, while also allowing the IRS to collect as much of the income tax debt as they can without having to resort to more costly collection efforts.

Who is eligible and qualified for an Offer in Compromise settlement?

In order for the IRS to accept your Offer in Compromise (OIC) settlement, one of three conditions must be fulfilled. The first is if there is reasonable and demonstrable doubt as to the legitimacy or accuracy of the tax liability. You cannot file for an IRS settlement (OIC) based solely on this condition if you have had other opportunities to dispute the income tax liability but did not take action.

Secondly, an Offer in Compromise (OIC) may be accepted if there is doubt as to the collectability of the debt, meaning the tax debtor can prove that the IRS would not be able to actually collect the owed debt (such as if the debtor has no assets, etc.).

Finally, an Offer in Compromise (OIC) settlement may be accepted based on “Effective Tax Administration,” which means that neither side disputes the income tax liability or the collectability of the full debt, but it is clear that collecting the full debt would cause the taxpayer undue hardship. An IRS settlement (OIC) is often times requested on the grounds of effective tax administration when the taxpayer is elderly or has a disability.

What does the IRS consider for a successful Offer in Compromise?

Under all circumstances the IRS will analyze the tax debtor’s income, expenses, asset equity, and ability to pay when determining whether or not to accept an Offer in Compromise ( OIC) settlement.

Submitting an Offer in Compromise.

If you are an eligible and qualified taxpayer who is interested in receiving an Offer in Compromise (OIC) settlement on your income tax debt, you must submit the proper forms to request your IRS settlement from the IRS. Your IRS Tax Attorney at Flat Fee Tax Service, Inc. will prepare forms you must submit and present them in the best possible light so as to maximize your chances of having your Offer in Compromise accepted.

You will need to include a $186 application fee and your initial payment from your requested OIC payment plan (unless you meet specific low income certification guidelines). Depending on your IRS settlement that you are requesting, this could be a lump-sum payment of 20% of the total Offer in Compromise (OIC) settlement amount offered, or a periodic payment where you submit the initial installment of a proposed payment plan and you continue to adhere to that plan while the IRS considers the offer and after if it is accepted.

What happens when the IRS accepts/rejects your Offer in Compromise?

If your Offer in Compromise is accepted, you will adhere to the settlement plan that you proposed. If it is rejected, you have the opportunity to appeal within 30 days, otherwise the IRS will continue to pursue the collection of the full amount of your outstanding tax debt.

The Offer in Compromise can be your Fresh Start and lifeline when you are unable to fulfill your income tax obligations. If you are facing IRS tax issues, please contact the best IRS help team at Flat Fee Tax Service, Inc. to learn about your options with regard to achieving a successful IRS debt settlement, and to decide on your best course of action for overcoming your income tax debt.



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