5 Essentials Things to Remember About the IRS Offer in Compromise Program

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Mired in tax debt? The IRS offer in compromise could be your path to a fresh start. This program allows select taxpayers to settle their bill for far less than they actually owe. Whether you intend on seeking an OIC or simply would like to know more about your options, you’ll want to keep the following five considerations in mind:

  1. The IRS is incredibly thorough when assessing OIC candidates

The IRS is not quick to provide offers in compromise. Expect a thorough financial investigation, with the IRS delving into your assets, debts, income, and expenses. You may need to furnish bank statements or other documents to prove your eligibility.

  1. The consequences for incorrectly filing or furnishing the wrong information can be harsh

IRS Form 433-A is completed under the penalty of perjury. Not only could your OIC be promptly rejected if the IRS determines that you’ve hidden assets, you could also face criminal action.

  1. Missing tax returns can render OIC candidates ineligible

Before you apply for an offer in compromise, it is essential that you are current on all tax returns. It is IRS policy to reject all OIC applications for taxpayers who fail to file all necessary returns.

  1. The IRS maintains a low acceptance rate for OICs

The IRS is notorious for rejecting OIC applications. In 2013, for example, the IRS received 74,000 applications — and only accepted 31,000. The acceptance rate has been on the rise in recent years, but the IRS continues to reject over half of taxpayer applications.

  1. It’s possible to appeal a rejected OIC

Don’t be deterred by low acceptance rates. If you receive notification of rejection, you may appeal your case within 30 days. Your appeal should include specifics as to why you disagree with your rejection.

An IRS offer in compromise could be well within reach if you work with a trusted tax professional. Call the Highland Tax Group today to get started.