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What Is an IRS “Offer in Compromise” and How to Do You Qualify?

What Is an IRS “Offer in Compromise” and How to Do You Qualify?

By on Apr 18, 2017 in Taxes | 0 comments


As tax day approaches, you may be wondering how you’ll be able to pay what you owe to the Internal Revenue Service (IRS) this year.  This stress may be compounded if you already owe back taxes to the government.  One strategy for making these tax payments easier is considering what the IRS calls an “Offer In Compromise”, or an OIC. Basically, an OIC is an agreement between a taxpayer and the IRS to settle a tax debt for less than the full amount that is actually owed.  Generally speaking, the IRS tends to accept up to about 40% of OICs that are submitted, so this may be a viable option to consider.

Do I Qualify for an Offer In Compromise?

In order to qualify for an OIC, you must show the IRS at least one of the following:

  • You can prove that you are unable to pay the tax debt in full either now or in the future. The IRS must believe that there is doubt of your ability to pay to grant approval.
  • You can provide that because of an exceptional circumstance, paying the tax bill would cause you an economic hardship or would somehow be inequitable.

What Do I Need To Apply For An OIC?

To apply for an OIC, you should be prepared to follow a formal application process with the IRS, which includes paying a $186 fee. You will be required to submit detailed financial information such as pay stubs, bank records, vehicle, and home information along with your application to prove that you do not have the funds to pay the tax debt in full, or using an installment agreement.

Negotiating an OIC can be difficult, and if you decide to pursue this option, it may be in your best in interest to partner with a tax firm that has experience successfully negotiating these agreements with the IRS.  Because not all offers are granted, and you are providing confidential information to the IRS about your financial picture, you should be sure that your application is strong and has a good chance of being approved.

Making a Strong Case

Success Tax Relief is a full service tax firm based in Texas, that serves clients all over the country.  We have experienced tax professionals who have worked repeatedly with the IRS, and can use their experience to help you.  Our team can work with you right away and will get started by reviewing your tax returns (current and past) as well as some basic financial information to determine if you would be a strong candidate for an OIC. If so, we will then develop the strongest application possible and re-submit it on your behalf if needed.  The bottom line is that if you partner with the team at Success Tax Relief, you can feel confident that our team will work hard to resolve your tax problems.  No more worrying about opening the mail and finding a letter from the IRS.

  • Call us today at 877-825-1179 to learn more about how an offer in compromise might work for you.

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