The IRS offer in compromise can dramatically lighten your tax burden, but you shouldn’t rest easy just yet. Far too few offers are accepted, with the following mistakes often standing in the way.
- Skipping Financial Details
Attention to detail is critical when you apply for an OIC. Plan to submit extensive information about your earnings, your assets, and more. The IRS may request copies of your bank records, financial statements, or income earning statements.
- Forgetting to Check For Errors
Double-check your OIC to ensure that every detail is correct. Simple mathematical errors can lead to a swift rejection. One mistake especially worth fixing: blank spaces, which will absolutely not be tolerated by the IRS.
- Too Low of an Offer
There’s a fine line between reducing your total debt and low-balling the IRS. Take the latter approach, and your offer might be rejected. The good news? The IRS will conduct its own estimate and grant you an opportunity to adjust your offer accordingly. Fail to accept this corrected figure, however, and you can kiss your OIC goodbye.
- Go on a Shopping Spree
The more you can reign in spending as you prepare for your OIC application, the better. The IRS scrutinizes applicants’ spending habits — and major purchases will not play out in your favor.
- Neglect to Submit Your Tax Return
Unfortunately, in addition to going through the hassle of submitting an OIC, you’ll also need to continue to file necessary tax returns on time. If you’ve successfully obtained an extension, however, you’ll be considered current for your unfiled return.
Don’t risk a rejected offer in compromise. With the Highland Tax Group in your corner, you can increase your chances of acceptance — and pave the path to a lighter tax burden. Contact us today to learn more about the valuable role we play in securing IRS offers in compromise.