The Internal Revenue Service (IRS) recently changed how it is processing offers in compromise applications. The change is intended to help better ensure that all necessary information is included before filing the initial application. Unfortunately, it could translate to an increased risk of a denied offer.
What is an Offer in Compromise? An Offer in Compromise (OIC) is defined by the IRS as an opportunity for a taxpayer to settle his or her “tax debt for less than the full amount” owed.
How does a taxpayer qualify for an OIC? In order to qualify, the taxpayer must establish that paying the debt as it is currently owed would result in financial hardship. This can be shown in a variety of ways, including providing the IRS with information about the taxpayer’s ability to pay, the current income and expenses as well as the presence of any asset equity.
This may sound like an easy process at first glance, but it is important to note that the IRS generally conducts an in-depth investigation prior to agreeing to any proposed offer.
What has changed? In addition to carefully reviewing any applicant, the IRS stated in an Important Notice that it has further tightened its requirements by explaining that it would “return any newly filed offer in compromise application if [the applicant has] not filed all required tax returns.”
This change provides one example of the many requirements that must be met for an offer to be approved.
How can I increase the chances of a successful offer in compromise? This recent change highlights the difficulties that can arise when attempting to navigate a tax controversy issue. As such, it is wise for those who are struggling with tax obligations to seek legal counsel.
The lawyers at Robert J. Fedor, Esq., L.L.C., are well-versed in the IRS offer in compromise program, and spend the necessary time with clients to educate them on the process. Having this knowledge and experience on your side can make a difference in whether an offer in compromise is accepted.
Contact Us to Explore Your Options
To discuss whether you qualify as a candidate for the offer in compromise program, contact Robert J. Fedor, Esq., L.L.C., at 800-579-0997, or email our firm. We invite you to arrange a phone consultation or a meeting at our offices in Cleveland, Ohio, or Chicago, Illinois.