Let’s face it. The IRS wants to collect its tax debt. And if you owe a large sum, they especially want to bring that money in. Sure, they aren’t paid on commission, but this is their job, and, probably like all of us, they are held to certain marks and standards. With that being said, a settlement with the IRS (also called an Offer in Compromise) isn’t impossible (it’s just not exactly easy, either).
Offer in Compromise (OIC) Defined
An OIC is basically a debt settlement with the IRS that allows you to resolve your tax debt for less (often considerably less). To make this negotiation possible, you need to properly show the IRS that you don’t have the ability to pay your total tax debt. That sounds easy, right? I mean, your bank account might reflect it, your employment or business status might make it seem obvious, but…it’s not exactly that simple.
OIC Submission Process
To start, all necessary paperwork must be submitted to the IRS. Once documentation is in, an Offer Examiner will be assigned your case. Keep in mind, that doesn’t mean they will actually get started on it. In fact, these individuals have up to two years before a decision is required! Often if you (or your tax advocate) are not pushing them to make things happen, your file can fall to the bottom of the stack.
Once an Offer Examiner has made a decision, they can give a few responses following the submission of an OIC.
- They can accept the OIC without question (rare).
- They can request more documentation (this is often when a skilled tax negotiator is crucial).
- They can deny the OIC.
Appeals, Appeals, Appeals
If you find your OIC has been rejected, you have the right to appeal the decision. You will have 30 days to submit your appeal, and you will need to include further information for why you should, again, be considered for an OIC. If you are at this stage, and you still haven’t used a professional, consider it. A professional tax advocate can:
- Explain the reasoning for why your appeal was originally rejected.
- Look into other documents that may help your case following appeal.
- Advocate on your behalf directly with your Offer Examiner.
Don’t Lose Hope
No one wants to be in debt—especially to the IRS. While the OIC process may seem overwhelming, with the right help it IS possible to negotiate your tax debt down to a reasonable amount. In fact, we recently did exactly that with James*. You can read his story here (including the actions we took following a rejection of his initial OIC).
Ready to fight back? Contact Direct Tax Relief at 1-877-505-4829.
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