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What is an Offer in Compromise (OIC)?

An Offer in Compromise “OIC” is an opportunity for taxpayers to make a deal with the IRS or NY to significantly reduce their outstanding tax debt and make a fresh start. If certain qualifications are met, the government will accept less than the amount owed and call it even. Recently, the IRS has been accepting an increasing number of Offers compared to prior years. So, now is the time to act. No more sleepless nights worrying about how you will pay your tax debt.

How does an OIC work?

In order to make a deal, one of the following
conditions must exist:

  • Doubt as to Collectability
  • Doubt as to Liability
  • Exceptional Circumstances

An OIC is most often filed for doubt as to collectability, that is, when a taxpayer simply does not have the means to pay the debt they owe. The government would rather compromise the debt and collect some of what you owe then nothing at all. But they won’t settle for less than what they deem collectable.

With the help of a qualified CPA with experience in OIC filings, the taxpayer can make an offer to the taxing agency based on a complicated computation of what they can afford to pay. The IRS will then either accept or reject the offer. There is often a back and forth process of negotiation. The process is one that takes time, full disclosure of all assets and liabilities and of course the government’s red tape specialty: forms and paperwork!

Can I qualify for an OIC?

Before we can submit an OIC on your behalf,
you must:

  • be current with all tax return filings
  • have submitted all estimated tax payments as well as payroll tax deposits (if a business) for the current year
  • NOT be in an open bankruptcy proceeding

Won’t bankruptcy eliminate my tax debt?

No. The fact is bankruptcy has almost no impact on your tax debt. Almost all tax debts are immune to any bankruptcy action. These debts survive and will haunt you unless you negotiate an Offer in Compromise.

Will an OIC affect my credit score?

Yes. But, the good news is it will affect it positively! That’s right. Once an OIC has been accepted by the taxing authority involved and your debt has been fully satisfied, liens are released, and your credit score will improve. Unlike the dark cloud of bankruptcies, which take years to come out from under, an OIC can help restore your creditworthiness.

Work with a CPA firm to avoid default or all bets may be off!

Recognize that this is your opportunity to get out from under burdensome tax debt but remember it’s also a one-time deal. The government is giving you a chance to start over but expects you to get back on track.

What does that mean?

  • You must stay current on all taxes including estimated taxes for a period of at least 5 years following the acceptance of an Offer
  • You must make regular payments to ensure repayment of the settlement amount within a reasonable timeframe

Failure to stay current or make regular payments on the agreed-to amount can trigger a default that will likely take the settlement off the table leaving you owing the original amount in full.

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Snooze and Lose

If you don’t pay your tax debt, you can lose your driver’s license, passport and other privileges.

DSJCPA Safeguards Your Financials

The process for OIC submission can take a minimum of six weeks. It requires an in-depth look at sensitive personal and business financials. Beware of firms that boldly advertise tax debt relief. Many of them offer to fast-track the process for a percentage of the savings. Rarely do they have your best interest in mind. Often, for every ten clients whose OICs are rejected, they may get one settlement but, for them, that one payday can be enough. With DSJCPA you pay a fair hourly rate and have our guarantee that your records are kept secure. After all, the last thing you need is to unleash problems from other creditors.

We have a 99% success rate because we continue to file on behalf of our clients until we get an agreed-upon settlement. We will also advise you upfront if we think that making an Offer is no tright for you.

Give us a call. We can bring you peace of mind, restore your credit worthiness, and get you free of liens.

Millions Saved by Taxpayers

The IRS writes off millions of dollars of debt annually. It boils down to collectability. DSJCPA has handled numerous OIC filings and has a 99% success rate in reducing the tax debt of its clients by substantial amounts.

“One of our clients was facing an accumulated payroll tax liability and personal income tax debt of $2.6 million,” says Gigi Boudreaux, DSJCPA.

“We were able to reduce his liability to $65,000.”

In another case, DSJCPA settled a $1.1 million liability for $80,000.

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