What is an offer in compromise?
The Offer in Compromise (OIC) is a challenging tax resolution option, known for its stringent qualification criteria. Despite being the top choice under the Fresh Start Program, meeting its requirements is tough.
The IRS only approves OIC applications from taxpayers unable to pay their full federal tax debt. Securing an OIC demands compelling evidence of severe financial hardship.
Successful negotiation can significantly reduce the taxpayer’s liability, sometimes by over 90%, through services like TaxRise.
Qualifying For An Offer in Compromise (OIC)
The IRS assesses your compliance based on your tax filing status. Failure to file tax returns renders you non-compliant with the IRS and ineligible for an Offer in Compromise, as well as other IRS Fresh Start Initiative relief programs.
After bringing your tax filings up to date, you may proceed to submit IRS Form 9465 to request an Offer in Compromise.
Rejected Offer In Compromise (OIC)
Although submitting IRS Form 9465 isn’t particularly difficult, the IRS commonly denies requests for Offers in Compromise.
It’s advisable to apply for an Offer in Compromise after building a strong case demonstrating financial hardship and an inability to settle your tax debt.
There’s no specific minimum tax liability required to qualify for an Offer in Compromise. Eligibility for resolution varies based on each taxpayer’s individual financial circumstances and liability.
Can I Qualify On My Own?
While not mandatory, seeking professional assistance to submit an Offer in Compromise is highly recommended. This resolution is notably challenging and often demands extensive tax expertise. Representing oneself in an OIC case is akin to facing a prosecutor without legal counsel.
The IRS utilizes all available resources and tactics to disqualify OIC submissions. IRS examiners meticulously scrutinize submissions and swiftly reject any with even minor errors. Often, taxpayers lack familiarity with the required language and financial documentation, leading to rejection.
Furthermore, if the IRS rejects a taxpayer’s OIC submission, it significantly diminishes their prospects of resolving their tax liability successfully in subsequent attempts.
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