How To Complete An Offer In Compromise
The IRS has many programs available to taxpayers who have unpaid tax bills. One of the most popular programs is called the IRS Offer in Compromise. The IRS receives a substantial number of OICs each year, but has only limited processing capabilities in Memphis, TN and Brookhaven, NY (the two locations in charge of processing the offers).
The IRS has made great strides in improving the processing of OICs. These efficiencies are making it easier for taxpayers to navigate the OIC process and enable them to receive responses in a timely manner.
Most offers in compromise are denied as the IRS recently stated that over 83% of the offers are rejected. The two main reasons that rejection occurs is because the documentation is inaccurate or incomplete or the taxpayer earns in excess of the required allowance. Your offer in compromise attorney will make sure that your filing is accurate and complete.
Upon submission of the OIC, the IRS must verify that the offer can be processed. The offer goes through a screening process to determine if the taxpayer or taxable entity has: (1) paid the required application fee; (2) ensured that all delinquent tax returns have been filed; (3) not instigated a bankruptcy court proceeding; and (4) not been issued an audit notification.
The taxpayer has a few weeks to respond with the requested items. If the response is not timely, the IRS can return the offer and dismiss the offer if need be. If the offer is returned, the IRS will not refund the processing fee.
Make sure that you cooperate fully with the IRS and provide any necessary documentation with a quick turnaround. In addition, make sure that you keep all of you tax filings current and pay any required estimated taxes by the due date.
Hiring an offer in compromise attorney can help you improve the chance that your offer will get accepted. At a minimum they can review your situation and provide you valuable information that will allow you to make an informed decision.
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