The IRS Offer in Compromise (OIC) program provides a valuable opportunity for those who struggle under the burden of tax debt; qualified individuals agree to make payments in exchange for a significant reduction in tax liabilities. But while accepted taxpayers and certain IRS representatives sing the program’s praises, statistics often tell a different story.
Applications And Rejection Rates
The IRS received over 64,000 Offer in Compromise applications in 2012 and 74,000 applications in 2013. Typically, fewer than half of submitted applications are accepted; in 2012, the IRS accepted just 24,000 applications, versus 31,000 in 2013. For most of the past decade, the acceptance rate has hovered somewhere between 30 and 40 percent.
Average Offer in Compromise Value
The individual values of OIC agreements can vary considerably from one taxpayer to the next. Averages also vary from year to year. In 2015, the IRS awarded an average $7,585 to taxpayers who qualified for the OIC program.
National Standards
The IRS uses both national and local standards to determine eligibility for the OIC program. National standards for living expenses take the cost of food, housekeeping supplies, clothing, and personal care products into account. In 2018, the national standard for allowable living expenses totaled:
- $647 for a one-person household
- $1,202 for a two-person household
- $1,384 for a three-person household
- $1,694 for a four-person household
After four people, the IRS provides an additional allowance of $357 per person.
As the above statistics indicate, the IRS Offer in Compromise program is far from perfect. Still, it offers a valuable opportunity for relief. Don’t think of an OIC agreement as a sure thing, but rather, as a rare chance for a fresh start.
Are you interested in obtaining an IRS Offer in Compromise? You need not go it alone; Highland Tax Resolution can help you score an OIC and get your tax situation under control. Call us immediately at 720-398-6088 to see if you qualify for the IRS Offer in Compromise!