What is an Offer-In-Compromise?
December 15, 2005
What is an Offer-In-Compromise?
The Offer-In-Compromise program of the Internal Revenue Service allows a taxpayer who owes federal taxes, penalties, and/or interest to pay only a fraction of the total amount owed. It is designed for taxpayers who either: 1) can not afford to pay the taxes, penalties, and interest owed within a reasonable time, or 2) can afford to pay what is owed within a reasonable time, but believe that they either do not owe what the Internal Revenue Service claims or believe that it would be unfair or inequitable to have to pay the taxes, penalties, and interest in full.
What about the claims about “pennies on the dollar” I see on TV?
Consider this, these firms overspend in advertising to attract new clients so they must sell to more and more clients and cut corners in order to make a profit, the corners they cut will impact the success of your case. We frequently get calls from former clients or people that have just met with one of these “We spend big $ on TV and everyone qualifies” for an Offer-In-Compromise firms, we find that many of the Offers were either mishandled to begin with or should have never been filed in the first place because of the clients income and assets. As you might suspect an Offer-In-Compromise isn’t just a matter of asking the IRS, it must be proven and supported and the IRS or State isn’t rubber-stamping the approvals.
Can an Offer-In-Compromise be guaranteed?
No, it is illegal and completely unethical for any firm to do so. The IRS has published warnings about these types of firms. Avoid them at all costs! The guarantee is usually a murky (A client showed us a copy on one contract that had 57 different places the client had to initial and sign) contact by the firm that guarantees they will file an Offer-In-Compromise provide you do X by certain dates and pay their fees in advance. They do not guarantee the result, just their fees.
Can you tell me if I qualify for an Offer-In-Compromise?
Yes, be certain we will give you our best evaluation of your situation. We find that about three out every 10 people who call should consider moving forward with an Offer-In-Compromise, the other taxpayers should consider other solutions. Your qualification is determined by a number of factors that requires complete evaluation of your individual/business assets, income, and monthly expenditures. A few moments on phone will enable us to determine if further evaluation of your case is warranted. Avoid falling prey to be told and sold “what you want to hear.”
How much will the Offer be for?
Each case is unique and based upon your individual income and assets. Some clients can offer a very small percentage of their debt and others a much higher percentage. The claims that all debts are settled for 8-cents is pure advertising nonsense, each client is unique. Avoid “boiler room, take your money and run” firms that will tell you in one call how much your OIC will be for without a complete written evaluation of your financial information.
What and how long is the process?
Upon the determination that an Offer-In-Compromise negotiation is in your best interest, you determine the speed in which the process moves. Once we have all the required paper work we can complete the Offer-In-Compromise very quickly and get it you for your signature. Once it is filed the IRS cannot put a Levy on you. The IRS will respond to the filed OIC and may ask for additional substantiation of expenses or income/assets. The average time for an accepted Offer-In-Compromise is eight months.
What if the IRS rejects the Offer-In-Compromise?
We will appeal at no additional fee, provided that you have supplied all the required information and were accurate about your income, expenses, and assets. It is not uncommon for the IRS to reject an OIC and to accept it upon appeal. The “boiler room, take your money and run” firms do not include appeals in their fees so they can either dismiss you as a client or charge you again for the same work.
March 13th, 2006 at 3:11 am
I had a real substancial tax burden due to lack of/no communication from the IRS for many years regarding a question I had asked them. Even though they did not answer me, they did continue to accrue penaties & interest on me. I don’t have fifty thousand dollars, nor am I ever liable to. In my search for help I came across a company that swore they would help. They sounded real good, took my money, and did no more than I could have done for myself, then turned their back on me and even moved and quit answering their phone. I don’t know how a person can avoid being ripped off…unless you are reading this: I am telling you that they are real caring, knowledgeable, professional people. IRS State Tax Relief Associates gave me my life back. I had no hope left, couldn’t sleep at night; if you are reading this you probably understand what I am saying. I had already spent too much with the previous company I had went through. They interviewed me to size up my situation, then gave me my options. They were up front with me and let me know all scenarios (good and bad), that could result from the strategies offered. They worked hard for me, were honest, and got me out of trouble for under four thousand dollars…a far cry from 50,000! I never had to chase them to get an answer. They are usually there to speak to you and if not, they do return your call. I never had to deal with the IRS myself, and they kept me informed at all times. They actually called once just to make sure that I was OK. I will pay them every year to file for me. They follow the laws and are so knowledgeable that they save me a lot of money. It is well worthwhile to pay them to do my returns. If you are in trouble with the IRS or any taz agency: Do ask for an interview with them; then make up your own mind. I would recommend these people to anyone with a tax problem. You can be happy and have a life again…try it.
June 21st, 2006 at 11:27 pm
I called to find out if I would be a candidate for an offer-in-compromise or some other way to avoid paying the IRS the $30K of my hard-earned money that they say I owe. I spoke to Jeff and he told me that I should probably just borrow against my 401K to pay them off - that even doing an installment payment plan is not the best solution when they charge so much in penalties and interest. Not the answer I was hoping for, of course, since I don’t want to pay them!!
But I appreciated that Jeff took the time to call me, talk on the phone and not try to sell me on something that would be a waste of my time and money. Thanks Jeff! Finally a reputable, helpful organization!!
January 14th, 2007 at 1:00 am
My son started his own business when he was 23.He didn’t know how important it was to get his taxes done on time. Needless to say he got into trouble with the IRS. He tried to do an OIC on his own but there was just too much red tape. We found IRS Tax Relief Associates on the internet. We called Jeff and he assured us we could straighten this out.It was such a relief knowing someone knowledgeable was going to help us. We worked with Jeff and Ai-Ling Shea. She was wonderful and stayed with us for 2 years until we finally received an OIC. I would reccommend IRS Tax Relief Associates to anyone! They are great! We plan to continue to work with Ai-Ling to do his yearly taxes. Then we know it will be done right. Thank you IRS Tax Relief Associates!!