An Offer in Compromise, or OIC, is a formal agreement between the IRS and the taxpayer to settle for a lesser amount than what is owed in tax liability. Many State tax authorities will also offer a similar program.
This type of tax debt solution usually comes into play when the taxpayer is able to prove that they are not going to be able to repay the full amount of the debt. This falls under “Doubt as to Collectibility”. However, in some situations, the taxpayer may be able to provide proof that there is doubt over whether or not the taxes are truly owed. This would fall under 'Doubt as to Liability'. Finally, if the taxpayer can prove a unique financial hardship that warrants a Settlement of the debt, it comes under the category of 'Effective Tax Administration.'
When an Offer in Compromise is agreed upon, the IRS will use a formula to determine the amount they are willing to accept in lieu of full payment. If the taxpayer cannot pay this amount in full, then an Installment Agreement will be put in place for up to 24 months. Many people are eligible for an Offer in Compromise, but are unaware of this as a possible tax debt solution. At Golden Lion Tax Solutions, we can work with you to collect the appropriate evidence that you will need to support your request for an Offer in Compromise. It is important we negotiate a fair Settlement figure for you that will be realistically affordable. Remember that it is the IRS’ ultimate goal to push for as high a Settlement as possible, which results in demands being placed on you to pay more than your current financial situation will allow. We will be your partner and your advocate in pursuing a fair Settlement if you choose to go down the Offer in Compromise route as a tax debt solution.
Disclaimer: There are requirements that must be satisfied in order to qualify for some of the tax solutions we discuss on our website. Not all of our services will be suitable for every client. Golden Lion Tax Solutions is here to help you find the most appropriate resolution strategy to fit your situation.
